Hello!
Time interest earned ratio=income before tax and interest expenses÷interest expenses
3=X÷40000
Solve for x
X=3×40000
X=120000 This is income before tax and interest expenses but we need to figure out earning before tax only as required so
Earning before tax=120,000−40,000
=80,000. Answer
Good luck!
I believe the correct answer is C!
A.
The cheese and crackers that are being consumed
by Carlos is not considered to be inferior goods because when there is a time
that his income may rise, he will likely consume other products aside from it.
B.
If the price of the cheese falls, what will
likely happen is that there will be a presence of substitution effect of where
the crackers will be fewer consumed and the cheese will be consumed more. When
there is a presence of income effect on the other hand, the cheese will be
consumed more as this will be considered as a good that is normal and the
crackers to be consumed fewer as this will be classified as an inferior good. The
likely outcome of it in both scenarios, Carlos will still consume fewer
crackers and the cheese to be more consumed.
