Which of the Following Is Included in the Denominator of the Times-Interest-Earned

question 36

Multiple Choice

Which of the following is included in the denominator of the times-interest-earned ratio?

• A) Lease payments
• B) Principal payments
• C) Interest expense
• D) Gross profit

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed by the government on income, capital gains, or other taxable entities.

Operating Cash Flow

The cash that a company generates from the revenues it brings in, excluding costs associated with long-term investment on capital items or investment in securities.

CCA Class

A categorization under Canadian tax law that groups depreciable assets affecting the rate at which businesses can claim capital cost allowance for tax purposes.

Tourism Revenue

The income generated from tourists, including spending on accommodations, food, transport, and entertainment in the destination.