Lever Age pays an 8% rate of interest on $10.90 million of outstanding debt with face value $10.9 million. The firm’s EBIT was $1.9 million.

a. 2.18 times

b. 2.51 times

Explanation:

Missing question "a. What is its times interest earned? (Round your answer to 2 decimal places.) Times interest earned b. If depreciation is $290,000, what is its cash coverage? (Round your answer to 2 decimal places.) Cash coverage ratio"

a. Interest = Face Value * Rate of interest

Interest = $10.9 million * 8%

Interest = $872,000

Times interest earned = EBIT / Interest

= $1.9 million / $872,000

= 2.18 times

b. Cash coverage = (EBIT + Non Cash expenses) / Interest expenses

= ($1.9 million + $290,000) / $872,000

= $2.19 million / $872,000

= 2.51 times

answer: 11/12

step-by-step explanation: 4 1/4 and 3 1/3 is equivalent to 4 3/12 and 3 4/12. 4 3/12 - 3 4/12 =11/12