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

---

Definitions:

Social Control

Mechanisms, strategies, and structures within a society used to regulate individual behaviors and maintain social order.

Case Law

Case law consists of past judicial decisions that establish precedents and guide the interpretation and application of law in future cases.

Social Change

the transformation or evolution of cultural, economic, or political aspects of society over time.

Substantive Law

The segment of law that deals with the rights and duties of individuals and collective bodies, governing their relationships.