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A Company's Income Before Interest Expense and Taxes Is $250,000

Question 127

True/False

A company's income before interest expense and taxes is $250,000 and its interest expense is $100,000. Its times interest earned ratio is 2.5.
Times Interest Earned Ratio = Income before Interest Expense and Income Taxes/Interest Expense
Times Interest Earned Ratio = $250,000/$100,000 = 2.5

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