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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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"during the 1980s, incompatible computer products resulted in ____."
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How differently would you allocate assets between an elderly couple and a young entrepreneur?
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Max owns a townhouse in Sacramento. He is in the process of leasing it to Hannah. The contractual lease states Hannah Scott will
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The minimum requirement for a California lease that is missing in the contractual lease between Max and Hannah Scott is the<u> absence of a sufficient description of the property</u>.

<h3>What are the minimum requirements for a California lease?</h3>

A California lease requires a <u>sufficient description of the property</u>, for example, an address, which gives it a legal description.

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