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Consolidated Industries Has Total Interest Charges of $20,000 Per Year

Question 21

Multiple Choice

Consolidated Industries has total interest charges of $20,000 per year.Sales of $2 million generated an operating income of $220,000 and an after-tax profit of 6% of sales.The firm has a marginal tax rate of 40%.What is the firm's times-interest-earned ratio?


A) 10
B) 11
C) 12
D) 13

Correct Answer:

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