A Times Interest Earned Ratio of 5

question 108

Multiple Choice

A times interest earned ratio of 5.0 indicates that the firm:

• A) pays 5 times its earnings in interest expense.
• B) earns significantly more than its interest obligations.
• C) has interest expense equal to 5% of EBIT.
• D) has low tax liability.

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Definitions:

Positive Reinforcer

A stimulus that increases the probability of a behavior being repeated by providing a rewarding outcome.

Punishment

A consequence that follows an undesirable behavior, with the intent of reducing or eliminating that behavior.

Reinforcers

Stimuli, events, or conditions that increase the likelihood of a behavior being repeated.

Self-Modification Program

A self-directed plan designed to change one's behavior or habits through a structured process of self-observation, goal-setting, and reinforcement.