SEQ CHAPTER \H \R 1This Statement of Facts Is Presented

question 4

Multiple Choice

SEQ CHAPTER \h \r 1This statement of facts is presented for problems 22 and 23: The following data comes from Olde Towne Hospital's financial statements.Total revenues were $20 million.Total expenses were $18 million,consisting of patient care expenses - $13 million;administrative expenses - $2 million;depreciation - $2 million;and interest on long-term debt - $1 million.Principal payments on long-term debt were $1.5 million.
-What is Olde Towne's debt service coverage?

• A)0.8 times
• B)1.6 times
• C)2.0 times
• D)2.7 times

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