Financial Statements for Narlock Company Appear Below -Narlock Company's Times Interest Earned for Year 2 Was Closest

Multiple Choice

Financial statements for Narlock Company appear below:

$\begin{array}{|l|r|}\hline&\text {Larned Company } \\&\text { Income Statement } \\&\text { For the Year Ended December 31, Year } \\&2\\&\text { (dollars in thousands) }\\\hline\text { Sales (All on Account) } & \$ 2250 \\\hline \text { Costs of Goods Sold } & \$ 1570 \\\hline \text { Gross Margin } & \$ 680 \\\hline \text { Operating Expenses } & \$ 270 \\\hline \text { Net Operating Income } & \$ 410 \\\hline \text { Interest Expense } & \$ 50 \\\hline \text { Net Income before Taxes } & \$ 360 \\\hline \text { Income Taxes (30\%) } & \$ 108 \\\hline \text { Net Income } & \$ 252 \\\hline\end{array}$

-Narlock Company's times interest earned for Year 2 was closest to which of the following?

A) 5.0 times.
B) 7.2 times.
C) 8.2 times.
D) 13.6 times.