E13-5 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 2016. Let's see whether these changes are reflected in the income statement of Computer Tycoon Inc. for the year ended December 31, 2016. 2016 2015 $135,000 75,500 59,500 39,000 525 19,975 6,000 13,975 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 110,000 65,000 45,000 37,000 600 7,400 1.500 $5,900 Required 1. Compute the times interest earned ratios for 2016 and 2015. (Round your answers to 1 decimal place.) Earned 2015 2016 2. Does Computer Tycoon generate sufficient net income in both years (before taxes and interest) to cover the cost of debt financing