Use the Following Data to Answer the Question: What Are

question 24

Multiple Choice

Use the following data to answer the question: What are the three interest coverage ratios based on pretax income and interest expense? $\begin{array}{|l|l|l|} \hline& 2015 & 2016 \\\hline \text { Current assets } & \$ 860 & \$ 896 \\\hline \text { Current liabilities } & 710 & 818 \\\hline \text { Debt in current liabilities } & 1 & 39 \\\hline \text { Lurkg-term debt } & 506 & 408 \\\hline \text { Total assets } & 2,293 & 2,307 \\\hline \text { Capilal experuditures } & 111 & 117 \\\hline \text { Change in deferred taxes } & 29 & -20 \\\hline \text { Sales } & 4,100 & 4,192 \\\hline \text { Operating expenses } & 3,307 & 3,260 \\\hline \text { Rental expense } & 0 & 248 \\\hline \text { Gerieral expenses } & 562 & 528 \\\hline \text { Depreciation } & 139 & 136 \\\hline \text { Iriterest experise } & 39 & 30 \\\hline \text { Incuere taxes } & 5 & 8 \\\hline\end{array}$

• A)For 2016,interest coverage ratios based on EBIT,EBITDA,and EBITDAR are 5.47,5.47,and 1.48,respectively.
• B)For 2016,interest coverage ratios based on EBIT,EBITDA,and EBITDAR are 2.36,5.92,and 13.73,respectively.
• C)For 2016,interest coverage ratios based on EBIT,EBITDA,and EBITDAR are 0.93,5.47,and 1.48,respectively.
• D)For 2016,interest coverage ratios based on EBIT,EBITDA,and EBITDAR are 0.93,5.47,and 13.73,respectively.

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Definitions:

Political Considerations

Factors that involve the influence of politics or political decision-making in a business, organizational, or governmental context.

Time Constraints

The limited periods available to complete a task or project, often influencing the efficiency and quality of work.

Limited Information

Situations or decisions made where the available data or knowledge is incomplete.

Perfect Rationality

The assumption or condition under which individuals make decisions that are entirely logical and optimize their self-interest.