Montreal Brewing Company has an outstanding debt of $20 million.10 percent of the company debt bears an interest cost of 8 percent and the rest costs 6 percent.If their earnings before taxes are $5.2 million,then their times-interest-earned ratio would be:
A) 3.2
B) 4.2
C) 5.2
D) None of the above

Question

Quizplus · Accepted Answer

(5.2+2*.08+18*.06)/( 2*.08+18*.06)= 5.2

Montreal Brewing Company Has an Outstanding Debt of $20 Million