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$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Squamish Equipment
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Selected financial information
$\begin{array}{c}\begin{array}{lll}\hline \text { Expected net income after tax next year before new financing }\\ \text { Sinking-fund payments due next year on existing debt}\\ \text { Interest due next year on existing debt}\\ \text { Company tax rate}\\ \text { Common stock price, per share}\\ \text { Common shares outstanding}\\\hline\end{array}\begin{array}{r}\hline\$ 40 \text { million } \\\$ 14 \text { million } \\\$ 15 \text { million } \\36 \% \\\$ 20.00 \\18 \text { million } \\\hline\end{array}\end{array}$

-Please refer to the financial information for Squamish Equipment above.Calculate Squamish's times-burden-covered ratio for the next year assuming the firm raises $40 million of new debt at an interest rate of 7 percent and that annual sinking fund payments on the new debt will equal $8 million.

A) 1.01
B) 1.08
C) 1.38
D) 1.49
E) 1.95