The Dockside Inn has net income for the most recent year of $8,450.The tax rate was 35 percent.The firm paid $1,300 in total interest expense and deducted $1,900 in depreciation expense.What was the cash coverage ratio for the year?
A)10.48 times
B)11.48 times
C)12.39 times
D)12.46 times
E)13.07 times

Question

Quizplus · Accepted Answer

Earnings before taxes = $8,450/(1 - .35) = $13,000.00Earnings before interest, taxes, and depreciation = $13,000.00 + $1,300 + $1,900 = $16,200.00Cash coverage ratio = $16,200.00/$1,300 = 12.46 times

The Dockside Inn Has Net Income for the Most Recent