Question: A. Please calculate the Fixed Charge Coverage? B. Should the loan office approve the loan request? Why? The All Delivery Company needs to lease additional

A. Please calculate the Fixed Charge Coverage?

B. Should the loan office approve the loan request? Why? A. Please calculate the Fixed Charge Coverage? B. Should the loan

The All Delivery Company needs to lease additional trucks for its delivery business. The company approached the bank for a loan. The bank manager requested and was given the following information: 1. The company pays monthly lease payments of $13,000 for its fleet of trucks 2. The company pays annual interest expense of $55,000 on its loans 3. The company pays annual lease principal payment of $125,000 4. The company spends $19,000 annually to replace some of its equipments 5. The company pays $45,000 in taxes for the current year 6. The company generates EBITDA of $700,450 A. Please calculate the Fixed-Charge Coverage (15%) B. Should the loan officer approve the loan request? Why? (5%)

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