X-Caliber's income before interest and income taxes was $250,000 and its interest expense is $100,000.Its times interest earned ratio is.4.

Name: X-Caliber's income before interest and income taxes was $250,000 and its interest expense is $100,000.Its times interest earned ratio is.4.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The times interest earned ratio is calculated as income before interest and taxes (EBIT) divided by interest expense. For X-Caliber, this would be $250,000 / $100,000 = 2.5, not .4.

X-Caliber's Income Before Interest and Income Taxes Was $250,000 and Its