Calculate the Times Interest Earned Ratio for Paige's Purses, Inc

question 54

Multiple Choice

Calculate the times interest earned ratio for Paige's Purses, Inc. using the following information: sales = $50,000,000, cost of goods sold = $15,000,000, depreciation expense = $2,000,000, addition to retained earnings = $10,000,000, dividends per share = $1.10, tax rate = 30 percent, and number of shares of common stock outstanding = 10,000,000. Paige's Purses has no preferred stock outstanding.

• A) 0.27
• B) 3.30
• C) 11.00
• D) 16.67

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Definitions:

Minimum Imposed Price

A price floor set by the government or an agency, below which the price of a product cannot legally fall.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price over a specified period of time.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level.

Demand P

The desire and ability of consumers to purchase a good or service at a particular price, often represented as a demand curve.