A hospital organization is applying for a new loan to buy magnetic resonance imaging (MRI) equipment. The bank asks for financial statements before it will consider the loan. The income statement shows $500,000 of income before interest expense and income taxes. The overall interest expense for the year was $50,000. Which additional information will the bank need to determine if the loan can be approved?

Income tax ratio	A
Income earned ratio	B
Return on assets ratio	C
Times interest earned ratio	D

can you please explain in full the why or why nots of each answer. p.s. the answer is D. please help me understand in the easiest way possible?

 

Answer rating: 100% (QA)

Answer To determine if the loan can be approved the bank needs to assess the hospital organizations ability to cover its interest expense This is impo... View the full answer