Tiffanys fourth concern: Returning to the base case, use the data in exhibits 18.1 and 18.2 to calculate and interpret the times interest earned and the cash and marketable securities to annual interest expense at the optimal capital structure for RN Temps. Please show your calculations

18.1

EBIT	$ 12,000,000
No. of shares	10,000,000
Debt Amount	Cost of Debt	Cost of Equity
$0	0.0%	15.0%
$ 2,500,000	10.0%	15.5%
$ 5,000,000	11.0%	16.5%
$ 7,500,000	13.0%	18.0%
$ 10,000,000	16.0%	20.0%
$ 12,500,000	20.0%	25.0%

18.2

EXHIBIT 18.2 Healthcare Franchise Industry Data: Debt Ratings at Different Levels of Debt Ratio (Total Debt/Total Assets)
					Precentile	Debt Ratio	Debt Rating
10th	10%	AAA
25th	25%	AA
40th	35%	A
Meadian	50%	BBB
60th	65%	BB
75th	75%	B
90th	82%	C