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If a Firm Has Interest Expenses of $10,000 Per Year

Question 9

Multiple Choice

If a firm has interest expenses of $10,000 per year, sales of $700,000, a tax rate of 40%, and a net profit margin of 7%, what is the firm's times interest earned ratio (round to two decimals) ?


A) 8.17
B) 4.90
C) 13.25
D) 9.17

Correct Answer:

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