Which Ratio Measures the Number of Dollars of Operating Earnings

question 67

Multiple Choice

Which ratio measures the number of dollars of operating earnings available to meet the firm's interest dollars and other fixed charges?

• A)Times interest earned
• B)Basic earning power
• C)Fixed charge coverage ratio
• D)ROA

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Definitions:

Marginal Cost

The outlay required to produce another unit of a product or service.

Marginal Benefit

The additional benefit to a consumer from consuming one more unit of a good or service.

R&D Expenditures

Costs associated with research and development activities undertaken by a company to innovate or improve products or processes.

Marginal Cost

The incremental cost involved in manufacturing an additional unit of a good or service.