tb mc qu. 11 - 67 (algo) a company had interest... a company had interest expense of $3,900. income before…

tb mc qu. 11 - 67 (algo) a company had interest... a company had interest expense of $3,900. income before interest expense and income taxes of $16,600, and net income of $7,000. the company’s times interest earned ratio equals: multiple choice 0.23 4.26 0.56

tb mc qu. 11 - 67 (algo) a company had interest... a company had interest expense of $3,900. income before interest expense and income taxes of $16,600, and net income of $7,000. the company’s times interest earned ratio equals: multiple choice 0.23 4.26 0.56

Answer

Explanation:

Step1: Recall the formula

The times - interest - earned ratio formula is $\text{Times Interest Earned Ratio}=\frac{\text{Income before interest expense and income taxes}}{\text{Interest expense}}$.

Step2: Substitute the values

We are given that income before interest expense and income taxes is $$16,600$ and interest expense is $$3,900$. So, $\text{Times Interest Earned Ratio}=\frac{16600}{3900}\approx 4.26$.

Answer:

4.26