-The Above Information Is Available for the Firm ILA Ltd,which

question 38

Multiple Choice

$\begin{array}{|l|l|}\hline \text { Item } & \text { Value as at 2010, in millions } \\\hline \text { Sales revenue } & 8.902 \\\hline \text { Operating revenue } & 9.360 \\\hline \text { Trading profit before interest and tax } & 5.360 \\\hline \text { Operating profit before interest and taxes } & 3.118 \\\hline \text { Interest expense } & 1.361 \\\hline \text { Operating profit after tax } & 0.360 \\\hline\end{array}$
-The above information is available for the firm ILA Ltd,which is listed on the Australian Stock Exchange.As a prospective investor in ILA,you are concerned about the level of debt the company has on issue.How far can the earnings of ILA fall before it will be unable to meets its debt obligations?

• A) \( 0.436 \)
• B) \( 0.480 \)
• C) \( 0.564 \)
• D) \( 0.602 \)

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Definitions:

Collective Security

A system in which a group of nations agree to act together to defend any member country that is attacked, aiming to maintain international peace and security.

Irreconcilables

A group of U.S. senators who opposed the Treaty of Versailles and U.S. membership in the League of Nations after World War I, fearing it would limit national sovereignty.

Treaty of Versailles

The 1919 peace treaty that ended World War I, imposing punitive conditions on Germany and redrawing the map of Europe, significantly impacting future international relations.