Indicate whether each of the following statements is true or false.a)EBIT stands for earnings before income taxes.b)EBIT can be used in the computation of the return-on-assets ratio.c)A low times-interest-earned ratio is a sign of a high-risk company.d)Dividends are deductible in the determination of taxable income.e)Interest is deducted on the income statement but is ignored on the tax return.

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b)True c)True d)False e)Fa)This is false. EBIT stands for earnings before interest and taxes.b)This is true. The return-on-assets ratio is commonly computed by dividing EBIT by total assets.c)This is true. A low times-interest-earned ratio indicates that a company may have difficulty making required interest payments.d)This is false. Dividends are not tax deductible.e)This is false. Interest is deducted on both the income statement and the tax return.

Indicate Whether Each of the Following Statements Is True or False.a)EBIT