Westmoreland Company
Following Are Selected Data from Westmoreland Company's Financial

question 87

Multiple Choice

Westmoreland Company
Following are selected data from Westmoreland Company's financial statements.
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$\begin{array}{lrr}&2018&2017\\\text { Current liabilities } & \$ 230,000 & \$ 160,000 \\\text { Long-term debt } & 120,000 & 320,000 \\\text { Stockhol ders' equity } & 420,000 & 540,000 \\\text { Cash payments for additions to plant and equipment } & 45,000 & 32,000 \\\text { Net cash flow from operating activities } & 80,000 & 51,000 \\\text { Interest and principal payments } & 12,000 & 8,000 \\\text { Net operating cash flows before interest and taxes } & 68,000 & 43,000 \\\text { Net income } & 90,000 & 72,000 \\\text { Interest expense } & 8,500 & 11,500 \\\text { Income taxes } & 16,000 & 14,500 \\\text { Dividends paid } & 15,000 & 30,000\end{array}$ ​
-Refer to the Westmoreland Company data.
The company's times interest earned ratio for 2018

• A)shows an increase in the company's ability to pay its current debt when it comes due.
• B)indicates the company cannot meet its current year interest payments out of current year earnings.
• C)increased,which indicates the company's lenders will be pleased.
• D)decreased,which indicates the company has more cash to pay interest on its debt.

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Definitions:

Positive Reinforcer

An environmental stimulus that, when presented after a behavior, increases the probability of that behavior occurring again in the future.

Positive Reinforcement

The process of encouraging or establishing a pattern of behavior by offering rewards for desired behavior.

Nasty Stimulus

An unpleasant or harmful stimulus that can provoke negative reactions or behaviors.

Pleasant Stimulus

Any input or event that causes a positive emotional response, such as happiness or satisfaction.