If the Times Interest Ratio

question 42

Multiple Choice

If the times interest ratio:

• A) Increases, then risk increases.
• B) Increases, then risk decreases.
• C) Is greater than 1.5, then the company is in default.
• D) Is less than 1.5, the company is carrying too little debt.
• E) Is greater than 3.0, the company is likely carrying too much debt.

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Definitions:

Exergonic Reaction

An exergonic reaction is a chemical reaction where energy is released, typically in the form of heat, making the reaction spontaneous.

Pyruvate

A key intermediate in several metabolic pathways, including glycolysis, linking the metabolism of carbohydrates, proteins, and fats.

Lactate

A compound produced during the breakdown of glucose in the absence of sufficient oxygen, often associated with muscle fatigue and exercise.

Phosphate

A chemical compound containing the phosphate ion, PO4^3-, involved in many biological processes including energy transfer.