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:

Society Gains

Refers to the overall benefits or improvements in welfare that accrue to a community or society from economic activities or policies.

Current Output

The total amount of goods or services produced by a firm or economy at a given time.

Pareto Optimality

An allocation of resources where any attempt to benefit one person results in harm to another.

Brooks Robinson

A famous American baseball third baseman who played for the Baltimore Orioles in Major League Baseball.