A Firm Has EBIT of $400,000 and Depreciation Expense of $20,000

question 130

Multiple Choice

A firm has EBIT of $400,000 and depreciation expense of $20,000. Fixed charges total $50,000. Interest expense totals $7,000. What is the firm's cash coverage ratio?

• A) 7.60 times
• B) 8.00 times
• C) 8.40 times
• D) 8.54 times

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Definitions:

Predictor Variables

Variables in statistical modeling that are used to predict or explain changes in a response variable.

Sequential Sums Of Squares

A method in statistics used to break down the total variation explained by a model into components related to each predictor variable.

Total Variation

In statistics, the total sum of squares that measures the overall variation within a dataset.

Demographic Variables

Characteristics of subjects that are often used to segment populations, such as age, gender, income, and education.