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Desjardin Landscaping's income statement reports net income of $75,300, which includes deductions for interest expense of $11,500 and income taxes of $34,900. Its times interest earned is:

a. 10.6 times
b. 7.5 times
c. 4.0 times
d. 6.5 times
e. 0.15 times

Respuesta :

zainsubhani

Answer:

Option A is correct (10.6 times)

Explanation:

Given Data:

Net Income=$75,330

Interest Expense=$11,500

Income Taxes= $34,900

Required::

Times interest earned=?

Solution:

Formula:

[tex]Times\ Interest\ Earned=\frac{Net\ income+Interest\ expense+Income\ taxes }{interest\ expense}[/tex]

[tex]Times\ Interest\ Earned=\frac{\$75,300+\$11,500+\$34,900 }{\$11,500}[/tex]

Times interest earned=10.58 times

Times interest earned≅10.6 times

Option A is correct (10.6 times)

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