A Firm Has EBIT of $1,000,000 and Depreciation Expense of $400,000

question 128

Multiple Choice

A firm has EBIT of $1,000,000 and depreciation expense of $400,000. Fixed charges total $600,000. Interest expense totals $70,000. What is the firm's cash coverage ratio?

• A) 1.00 times
• B) 1.67 times
• C) 2.33 times
• D) 2.45 times

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Definitions:

Deficit Principle

A principle that suggests that once a relatively satisfied need is no longer met, it will re-emerge and become the dominant motivator of behavior.

Motivator

Anything that stimulates interest or action, especially in terms of encouraging people to achieve goals or improve performance.

Higher-order Needs

Advanced human needs in Maslow's hierarchy, including esteem and self-actualization, beyond basic physiological and safety requirements.

Esteem

A respect and admiration, typically for a person, that results from their achievements or qualities.