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Setler79 [48]
3 years ago
10

Ram Company's after-tax net income was $120. Their interest paid was $50. Assuming the corporate tax is 40%, what is Ram Company

's interest coverage ratio?
Business
1 answer:
Nataliya [291]3 years ago
4 0

Answer:

5

Explanation:

The formula to compute the interest coverage ratio is shown below:

= (Earning before tax + interest expense) ÷ (interest expense)

where,

Earning before tax equal to

= Net income ÷ (1 - tax rate)

= $120 ÷ (1 - 0.40)

= $200

And interest expense is $50

So, the interest coverage ratio equal to

= ($200 + $50) ÷ ($50)

= 5

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Answer:

Degree of operating leverage = 7.8

Explanation:

given data

sales = 2,080 units

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Variable expenses = 25%

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solution

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here

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and

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so now put value in equation 1 we get

Degree of operating leverage = \frac{104000-26000}{104000-26000-68000}  

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There are different kinds of market. The option that is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world is that;

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<h3>What leads to perfect competition?</h3>

Firms are known to be in perfect competition due to;

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Firms are said to be in perfect competition when a lot of firms produce the same type of products and also these firms can do business in the market without any kind of restrictions.

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