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A Firm Has Total Interest Charges of R10,000 Per Year

Question 76

Multiple Choice

A firm has total interest charges of R10,000 per year, sales of R1 million, a tax rate of 40 percent, and a net profit margin of 6 percent.What is the firm's times-interest-earned ratio?


A) 16 times
B) 10 times
C) 7 times
D) 11 times
E) 20 times

Correct Answer:

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