A Firm Has Total Interest Charges of $10,000 Per Year,sales

question 105

Multiple Choice

A firm has total interest charges of $10,000 per year,sales of $1 million,a tax rate of 40 percent,and a net profit margin of 6 percent.What is the firm's times-interest-earned ratio?

• A) 16 times
• B) 10 times
• C) 7 times
• D) 11 times
• E) 20 times

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Definitions:

Organizational Buyers

Entities such as businesses, governments, and institutions that purchase products or services for their own use, for production, or for resale.

Direct To Consumer

A business model where products or services are sold directly to consumers, bypassing traditional intermediaries like retailers.

Marketing Channel

The route or pathway through which goods or services travel from the producer or manufacturer to the final user or consumer.

Mail-Order Catalog

A printed publication with a list of goods that can be purchased by mail.