A Company Had Fixed Interest Expense of $6,000, Its Income

question 34

Multiple Choice

A company had fixed interest expense of $6,000, its income before interest expense and any income taxes is $18,000, and its net income is $8,400. The company's times interest earned ratio equals:

• A) 0.33.
• B) 0.71.
• C) 1.40.
• D) 3.00.
• E) 12,000.

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Definitions:

Aggregate Demand Curve

A curve that shows the relationship between the overall price level in the economy and the total demand for goods and services at that price level.

Demand Curves

Graphs showing the relationship between the price of a good and the quantity demanded by consumers.

Market Price

The equilibrium price determined through the interaction of supply and demand in a competitive market.

Demand Curves

Graphical representations showing the relationship between the price of a good and the quantity demanded by consumers.