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Yuki888 [10]
3 years ago
13

The information related to interest expense of Classic Music, Inc. is given belowNet income $264,000Income tax expense $107,000I

nterest expense $66,000Based on the above data, which of the following is the times-interest-earned ratio?A. 5.00 timesB. 4.08 timesC. 6 62 timesD. 4.00 times
Business
1 answer:
lidiya [134]3 years ago
7 0

Answer:

Classic Music, Inc.

C. 6.62 times

Explanation:

a) The times-interest-earned (TIE) ratio measures a company's ability to meet its debt obligations based on its current income.  It is calculated as earnings before interest and taxes (EBIT) divided by the total interest payable on bonds and other debts.

b) The EBIT is $437,000 (Net Income + Income Tax and Interest Expenses).

c) Therefore, the TIE is equal to 6.62 times ($437,000/$66,000).

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A book or record in which certain types of transaction are recorded before becoming part of the double-entry book-keeping system. The most common books of prime entry are the day book, the cash book, and the journal
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3 years ago
The Mary Company primarily sells dishes, and recently purchased a cardboard box company. Mary's new cardboard box division has n
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Answer: $1.50

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Based on the information given in the question, we are informed that the variable cost of each box is $1.50 and usually has a contribution margin of $0.80 per box.

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3 years ago
The liquidity approach to measuring money defines the m2 money supply as
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3 years ago
You work for a marketing agency advising a client considering whether to drop prices during an economic downturn. The client, a
Thepotemich [5.8K]

Explanation:

1- One of the pieces of advice I could give the customer about lowering the balance sheet price is that this could generate different interpretations for the potential consumer, as there may be a perception that the price reduction of the product occurred due to the loss of product quality in relation to competing products.

2- There are other effective strategies for managing an economic crisis in addition to a direct reduction in the retail price, such as the psychological price strategy, which are the marketing techniques used by salespeople so that consumers respond emotionally to the product, and not a logical way, which generates a perception of greater benefit for the consumer, which can lead to increased sales without having to lower the price of the product.

6 0
3 years ago
Celine Co. will need €500,000 in 90 days to pay for German imports. Today's 90-day forward rate of the euro is $1.07. There is a
harkovskaia [24]

Answer:

$1,000

Explanation:

The computation of the expected value of the real cost of hedging payable is shown below:-

Real cost of hedging 1 = (€500,000 × $1.07 × (90 ÷ 360)) - (€500,000 × $1.02 × (90 ÷ 360))  

= $133,750 - $127,500

= $6,250

Real cost of hedging 2 = (€500,000 × $1.07 × (90 ÷ 360)) - (€500,000 × $1.09 × (90 ÷ 360))

= $133,750 - $136,250

= -$2,500

Expected value of the real cost of hedging payable = (Real cost of hedging 1 × Spot rate Given Percentage) + (Real cost of hedging 2 × Given percentage)

= ($6,250 × 0.40) + (-$2,500 × 0.60)

= $2,500 - $1,500

= $1,000

7 0
3 years ago
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