Substituting EBITDA for EBIT When Computing the Times Interest Earned

question 43

Multiple Choice

Substituting EBITDA for EBIT when computing the times interest earned ratio will make the company appear

• A) more leveraged.
• B) less leveraged.
• C) more profitable.
• D) less efficient.

---

Definitions:

Fixed-Ratio

A schedule of reinforcement where a response is rewarded only after a specified number of responses, leading to a high and steady rate of response.

Piecework

A type of employment where a worker is paid a fixed rate for each unit produced or action completed, rather than receiving an hourly or annual salary.

Commission

A fee or percentage allowed to a salesperson or agent for services rendered, often a percentage of the sale made.

Payment Method

A way of completing a financial transaction, such as cash, credit card, digital wallet, or bank transfer.