Lever Age pays an 9% rate of interest on $9.10 million of outstanding debt with face value $9.1 million. The firm’s EBIT was $2.9 million. What is its times interest earned? Note: Round your answer to 2 decimal places. If depreciation is $110,000, what is its cash coverage ratio? Note: Round your answer to 2 decimal places.

Lever Age pays an 9% rate of interest on $9.10 million of outstanding debt with face value $9.1 million. The firm’s EBIT was $2.9 million. What is its times interest earned? Note: Round your answer to 2 decimal places. If depreciation is $110,000, what is its cash coverage ratio? Note: Round your answer to 2 decimal places.

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Question

Lever Age pays an 9% rate of interest on $9.10 million of outstanding debt with face value $9.1 million. The firm’s EBIT was $2.9 million.

What is its times interest earned?

Note: Round your answer to 2 decimal places.
If depreciation is $110,000, what is its cash coverage ratio?

Note: Round your answer to 2 decimal places.

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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