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Consignment Shipments, Inc

Question 53

Multiple Choice

Consignment Shipments, Inc. had a times interest earned ratio of 11 to 1 in 2016. In 2017 the company incurred a substantial increase in interest expense with no overall effect on net income or taxes. The effect of the transaction is:


A) The ratio increased.
B) The ratio remained the same.
C) The ratio decreased.
D) There is insufficient information to predict the effect.

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