IOU Inc. has EBIT of $58,000, depreciation and amortization of $12,000, interest expenses of $21,000, principal repayments
Question:
IOU Inc. has EBIT of $58,000, depreciation and amortization of $12,000, interest expenses of $21,000, principal repayments of $17,000, and a tax rate of 35 percent. Calculate IOU Inc.'s interest coverage ratio and debt service coverage ratio.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 72% (11 reviews)
EBIT 58000 Depreciation and amortization 12000 EBITDA 70000 Interest expenses i...View the full answer
Answered By
Muhammad Mahtab
everyone looks that their work be perfect. I have more than a five year experience as a lecture in reputable institution, national and international. I provide perfect solution in marketing, case study, finance problems, blog writing, article writing, business plans, strategic management, human resource, operation management, power point presentation and lot of clients need. Here is right mentor who help clients in their multi-disciplinary needs.
5.00+
3+ Reviews
14+ Question Solved
Related Book For
Financial Management Concepts and Applications
ISBN: 978-0132936644
1st edition
Authors: Stephen Foerster
Question Posted:
Students also viewed these Finance questions
-
A proposed new project has projected sales of $125,000, costs of $59,000, and depreciation of $12,800. The tax rate is 35 percent. Calculate operating cash flow using the four different approaches...
-
In 1994, Mr. and Mrs. Adams formed ADC by transferring $50,000 cash in exchange for 100 shares of common stock and a note from the corporation for $49,000. The note obligated ADC to pay 10 percent...
-
Number One Retail, Inc. has a gross profit of $55 million, operating expenses of $22 million (which includes $6 million in depreciation and amortization), and interest expenses of $8 million. Its...
-
Suppose that 1 8 E1 1 E2 1 4 and E, E A = I. Express A as a product of elementary matrices. 1 1 -8 8 () A 1 -8 (A) A (C) A = 4 1 -4 -4 1 1 (D) A = 1 1 1 1 -8 1 1 1 -8 (E) A = 4 (F) A (G) A 4 4 1 1 1...
-
Why is the NPV of a relatively long-term project (one for which a high percentage of its cash flows occurs in the distant future) more sensitive to changes in the WACC than that of a short-term...
-
Refer to Exercise 6.62. A randomly selected candidate who took a CFA exam tells you that he has passed the exam. What is the probability that he took the CFA I exam?
-
What are some reasons a potential prospect might not be readily accessible? How far should you go to try to overcome such an accessibility problem before you move to the next lead?
-
Discuss when each of the following types of businesses is likely to recognize revenue: a. A shoe store. b. A shipbuilding firm constructing an aircraft carrier under a government contract. c. A real...
-
relation R(A, B, C, D, E). given the following set F of functional dependencies for a F {ABC, BCD, EA, BEC, ABE D} = (a) Is BE ABC implied by F? In other words, is BE ABC F+? If yes, use the...
-
Mulholland Corp., a lessee, entered into a non-cancellable lease agreement with Galt Manufacturing Ltd., a lessor, to lease special-purpose equipment for a period of seven years. Mulholland follows...
-
Deb Co. has interest-bearing debt of $122 million, non-interest-bearing debt of $33 million, and equity of $76 million. Calculate Deb Co.'s debt-to-assets, debt-to-equity, and...
-
Using Home Depot's 2010 and 2011 balance sheets in Figure 3.2 and statements of earnings in Figure 3.3 in Chapter 3, set up the ratios presented in Figure 4.4 for Home Depot for 2010 and 2011,...
-
Has capital mobility improved steadily over the past 50 years?
-
An Australian investor currently holds an A$240 million equity portfolio. He is considering rebalancing the portfolio based on an assessment of the risk and return prospects facing the Australian...
-
Refer to Table 10.5. Using GEE methods with cumulative logits, compare the two marginal distributions. Compare results to those using ML in Section 10.3.2. Table 10.5:
-
Fill in the blanks for the following statements: a. Source documents should be portioned into different zones for data, data, and depending upon the system inputs and reviewing form, for data that...
-
Discuss additional personal information that McZhao should gather from Cree in order to properly advise this new client. McZhao then focuses on Crees financial goals: Cree wants to fund university...
-
Determine, based on Beamons description of the Ogive Funds characteristics, his likely inclination to aggressively implement the funds strategy. Justify your response. Morris next meets Robin Barker,...
-
Find the area of the shaded region. The graphs depict IQ scores of adults, and those scores are normally distributed with a mean of 100 and a standard deviation of 15 (as on the Wechsler test). 75 110
-
What is the expected payoff of an investment that yields $5,000 with a probability of 0.15 and $500 with a probability of 0.85? Select one: O a. $325 O b. $5,500 O c. $2,750 O d. $1,175
-
A 10-year, 12 percent semiannual coupon bond, with a par value of $1,000, may be called in 4 years at a call price of $1,060. The bond sells for $1,100. (Assume that the bond has just been issued.)...
-
You just purchased a bond which matures in 5 years. The bond has a face value of $1,000, and has an 8 percent annual coupon. The bond has a current yield of 8.21 percent. What is the bonds yield to...
-
A bond that matures in 7 years sells for $1,020. The bond has a face value of $1,000 and a yield to maturity of 10.5883 percent. The bond pays coupons semiannually. What is the bonds current yield?
-
A company's 2022 net sales are $80,187. The previous fiscal year, net sales were $76,118. What would the sales be for a 24 month pro forma projection? Show your work and explain how you arrived at...
-
ABC's stock price is $90. The stock price will either increase 10% or decrease 8% in the first month. If the price increases in the first month, it will go up by $12 or down by $15 in the second...
-
MyCarCorp produces car parts and is considering opening a new factory in Russia (assume now is beginning of 2002 and the factory would open in 2003). Factory will re- quire an initial investment of...
Study smarter with the SolutionInn App