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

question 132

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 fixed-charge coverage ratio?

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

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Definitions:

Relative Deprivation

A sociological theory that posits individuals feel deprived not on the basis of objective conditions, but by comparing their situation to that of others in their community or society.

Discrimination

Unfair or prejudicial treatment of people based on characteristics such as race, age, sex, or disability, rather than merit.

Attitudes

A settled way of thinking or feeling about someone or something, typically reflected in a person's behavior.

Behavior

The actions or reactions of an entity (often a person) in response to external or internal stimuli.