21. A high value for the times interest earned ratio means that a company is a higher risk borrower. FALSE AACSE: Commanicatione AKCPA BB: beduetry. Leesel ACCPA FN: Rish Afulyin Dificuly: Eay Leidming Olyective: A1 22. Times interest earned can be calculated by multiplying income by the interest rate on a company's debt. FALSE A.ACSR Comminicutions AIRPA BB: badiestry, Legai 23. The times interest earned ratio is calculated by dividing income before interest expense and income taxes by interest expense. TRUE A. \{C'S2. Coummawicatione ARCPA FN: Risk Anafonis Dificition: Aforinam Leaming Ofyective Al 24. Experience shows that when times interest earned falls below 1.5 to 2.0 and remains at that level or lower for several time periods, the default rate on liabilities increases sharply. TRUE