A Firm Has EBIT of $1,000,000 and Depreciation Expense of $400,000

question 132

Multiple Choice

A firm has EBIT of $1,000,000 and depreciation expense of $400,000. Fixed charges total $600,000. Interest expense totals $70,000. What is the firm's fixed-charge coverage ratio?

• A) 1.00 times
• B) 1.67 times
• C) 2.33 times
• D) 2.45 times

---

Definitions:

Literati Painter

An artist, typically from the Chinese literati class, who practices literati painting, focusing on personal expression and scholarly themes over technical perfection.

Haiku Poetry

A form of Japanese poetry characterized by a three-line structure with a syllable pattern of 5-7-5, traditionally focusing on nature and the seasons.

Sesshu Toyo

A prominent Japanese ink painter and Zen monk of the 15th century, known for his landscapes and mastery of ink wash techniques.

Yosa Buson

Yosa Buson was a renowned 18th-century Japanese poet and painter, well-known for his significant contributions to the development of haiku poetry alongside his artistic works.