E13-5 (Algo) Computing a commonly Used Solvency Ratio (LO 13-4, LO 13-5) According to the producer price index database maintained by the Bureau of Labor Statistics, the average cost of computer equipment fell 3.8 percent between January and December 2018. Let's see whether these changes are reflected in the income statement of Charger Equipment for the year ended December 31, 2018. Sales Revenue Cost of Goods Sold Gross Profit Selling, General, and Administrative Expenses Interest Expense Income before Income Tax Expense Income Tax Expense Net Income 2018 $ 101,000 60,500 40,500 36,100 510 3,890 1,000 $ 2,890 2017 $ 121,500 71,900 49,600 37,200 480 11,920 5,100 $ 6,820 Required: 1. Compute the times interest earned ratios for 2018 and 2017. 2. Does Charger generate sufficient net income in both years (before taxes and interest) to cover the cost of debt financing? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the times interest earned ratios for 2018 and 2017. (Round your answers to 1 decimal place.) Year Times Interest Earned 2017 2018