Q$.14.($b$)$ A company is presently working with an earning before interest and taxes $($EBIT$)$ of Rs$.90$

lakhs. Its present borrowings are :

$($Rs$.$ Lacs$)$

$12\mathrm{.}5\%$ term loan

$300$

Working capital :

Borrowing from Bank at $13\%200$

Public deposit at $11\mathrm{.}5\%,90$

The sales of the company is growing and to support this the company proposes to obtain

additional borrowing of Rs$.100$ lakhs expected to cost $15\%.$ The increase in EBIT is expected to

be $15\%.$

Calculate the change in interest coverage ratio after the additional borrowing and commitment.