The Interest Coverage Ratio Is Computed by Dividing

question 143

Multiple Choice

The interest coverage ratio is computed by dividing:

• A)Operating income by annual interest expense.
• B)Net income by annual interest expense.
• C)Carrying value of bonds by cash interest payments.
• D)Earnings per share by the prime interest rate.

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Definitions:

Prefrontal Cortex

The region of the frontal lobes of the brain involved in complex cognitive behaviors, personality expression, decision making, and moderating social behavior.

Dual Process Model

A theory suggesting there are two distinct systems for processing information: a fast, automatic, intuitive system, and a slower, more analytical, reflective system.

Prefrontal Cortex

The prefrontal cortex is a region of the brain associated with executive functions like decision-making, personality expression, and managing social behavior.

Limbic System

A complex system of nerves and networks in the brain, involving several areas near the edge of the cortex concerned with instinct and mood, regulating emotions, memory, and arousal.