Consolidated Industries Has Total Interest Charges of $20,000 Per Year

question 21

Multiple Choice

Consolidated Industries has total interest charges of $20,000 per year.Sales of $2 million generated an operating income of $220,000 and an after-tax profit of 6% of sales.The firm has a marginal tax rate of 40%.What is the firm's times-interest-earned ratio?

• A)10
• B)11
• C)12
• D)13

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Definitions:

Inner Conflicts

Psychological struggles within oneself that arise from opposing desires or impulses.

Maladaptive Behaviors

Actions or reactions that may provide short-term relief or escape from stress but ultimately lead to dysfunctional outcomes or interfere with normal living, well-being, or social interaction.

Unconditional Positive Regard

A caring, accepting, nonjudgmental attitude, which Carl Rogers believed would help people develop self-awareness and self-acceptance.

Operant Conditioning

A learning tactic where behavioral magnitude is conditioned by rewards or disciplinary actions.