Product Line Inc What Is the Interest Coverage for Product Line Inc

question 81

Multiple Choice

Product Line Inc.has the following data: $\begin{array} { l l l l } & \underline { 2 \times 13 } & \underline { 2 \times 12 } & \underline { 2 \times 11 } \\\text { Sales (all credit sales) } & \$ 800 & \$ 740 & \$ 675 \\\text { Less: Cost of Goods Sold } & \underline { 525 } & \underline { 490 } & \underline { 450 } \\\text { Grosi Profit }& \$ 275 & \$ 250 & \$ 225 \\ \text { Less: Operating Expenses } & \underline { 150 } & \underline { 140 } & \underline { 125 } \\\text { Operating Income }& \$ 125 & \$ 110 & \$ 100 \\\text { Less: Other Expense: Interest } & \underline { 10 } & \underline { 8 } & \underline { 5 } \\\text { Income before Tax }& \$ 115 & \$ 102 & \$ 95 \\\text { Less: Income Tax Expense } & \underline { 51 } & \underline { 46 } & \underline { 43 } \\\text { Net Income }& \underline { \$64 } & \underline { \$56 }& \underline { \$52 } \\\end{array}$ What is the interest coverage for Product Line Inc.in 2X13? Has the interest coverage improved or not improved since 2X12?

• A)12.5,not improved
• B)6)4,not improved
• C)11.5,improved
• D)12.5,improved
• E)6)4,improved

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