1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
kipiarov [429]
3 years ago
14

In the past year, TVG had revenues of $2.95 million, cost of goods sold of $2.45 million, and depreciation expense of $178,000.

The firm has a single issue of debt outstanding with book value of $1.15 million on which it pays an interest rate of 8%. What is the firm’s times interest earned ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Business
1 answer:
Firdavs [7]3 years ago
7 0

Answer:

3.5

Explanation:

Computation for the firm’s times interest earned ratio

Revenues$ 2.95 million

Cost of goods sold$ 2.45 million

Depreciation expense$ 178,000.00

Book values of Debt outstanding$ 1.15 million

Interest rate8.00

First step is to calculate for the EBIT

Using this formula

EBIT= Revenues -(Cost of goods sold +Depreciation expense$ 178,000.00)

EBIT=$2,950,000-($2,450,000+$178,000)

EBIT=$2,950,000- $2,628,000

EBIT=$322,000

Second step is to find the Interest

Using this formula

Interest =Debt outstanding with book value ×Interest rate

Let plug in the formula

Interest =$1,150,000×8%

Interest =$92,000

Now let find the firm’s times interest earned ratio

Using this formula

Firm’s times interest earned ratio=EBIT/INTEREST

Where,

EBIT=$322,000

INTEREST=$92,000

Let plug in the formula

Firm’s times interest earned ratio=$322,000/$92,000

Firm’s times interest earned ratio =3.5

Therefore the firm’s times interest earned ratio will be 3.5

You might be interested in
Corey has two jobs offers for sales jobs. For job A, he would earn a monthly salary of $2,500 and no commission. For job B, he w
maks197457 [2]

Answer:

job B

Explanation:

.05*50000=2500  and he gets 1000 so his total would be 3500

7 0
3 years ago
The law of diminishing marginal utility states that the: Multiple choice question. marginal utility associated with the consumpt
Drupady [299]

The law of diminishing marginal utility states that as more units of a good are consumed, the marginal utility from the consumption of the next unit becomes lesser. John's total utility from the consumption of two ice creams is 10, and his total utility from the consumption of three ice creams is 9.7.

<h3>What does the law of diminishing marginal utility State?</h3>
  • According to the law of declining marginal utility, when consumption rises, the marginal utility gained from each extra unit decreases, all other things being equal.
  • The incremental improvement in utility brought on by consuming one more unit is known as marginal utility.

<h3>Which law does the law of diminishing marginal utility affect?</h3>
  • According to the law of diminishing marginal utility, a good or service's marginal utility decreases the more of it is used by a person.
  • Consuming increasing quantities of a good gives economic actors less and less pleasure.

<h3>What is law of diminishing marginal returns?</h3>
  • According to the law of declining marginal returns, increasing the number of production factors leads to lesser increases in output.
  • The addition of any more of a production element after a certain level of capacity utilization would unavoidably result in lower per-unit incremental returns.

Learn more about diminishing marginal utility here:

brainly.com/question/13084220

#SPJ4

7 0
2 years ago
1. What are interest groups, and what roles (good and bad ) do they play in the political process?
MaRussiya [10]

Answer:

Interest groups are formed to promote the interests or concerns of their members. They are primarily concerned with influencing public policy. Because a key function is to exert pressure on political decision-makers, interest groups are sometimes referred to as 'pressure' or 'lobby' groups.

6 0
2 years ago
What do economies of scale, the ownership of essential raw materials, and patents have in common?
allsm [11]

Answer:

They all are barriers to entry.

Explanation:

For an imperfectly competitive firm: the marginal revenue curve lies below the demand curve because any reduction in price applies to all units sold.

6 0
3 years ago
Economists agree that a. neither high inflation nor moderate inflation is very costly. b. both high and moderate inflation are q
bezimeni [28]

Answer:

High inflation is costly, but they disagree about the costs of moderate inflation.

Explanation:

Inflation can be defined as the persistence rise in the price of goods and services. Inflation leads to a decline in the value of money this means that individuals may no longer to buy enough thing with the same amount of money which is previously enough to buy the things needed. The rise in the price of goods will equally mean inability to purchase the normal quantity of goods.

The main causes of inflation are demand pull and cost push. Demand pull occurs when manufacturers increase their prices due to the increase in demand for their products. Cost push occurs when manufacturers increase the prices of their products because the costs have also increased.

4 0
3 years ago
Other questions:
  • According to the Consider This box about hypothetical countries Slogo, Sumgo, and Speedo, small differences in __________ make f
    9·1 answer
  • Order these loans from highest monthly payment to lowest monthly payment. (Enter 1 as your answer to designate loan with highest
    11·1 answer
  • Anne-Marie Cole runs the sales division for a local auto insurance firm. One of her key duties is to calculate her company's mar
    14·1 answer
  • The continuous falling price level is called inflation.<br> True or false?
    11·1 answer
  • Worth Company reported the following year-end information: beginning work in process inventory, $180,000; cost of goods manufact
    10·1 answer
  • They could increase Marco's motivation by:
    6·1 answer
  • A sum of money was shared
    12·2 answers
  • PLEASE HELP AHHH! IM BAD AT BUSINESS ;-;
    5·2 answers
  • Organizations that rely on a few major customers may organize their people and resources by client. This is an example of ______
    7·1 answer
  • Kraft Bakeries introduced in 2019 a new line of frozen apple pie. For 2019, sales by quarter were as follows: 11,000 units, 16,0
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!