Ask Question
18 February, 08:43

In a recent year, Day Corporation had net income of $150,000, interest expense of $30,000, and tax expense of $20,000. What was Day Corporation's times interest earned for the year? a. 7.50 b. 5.00 c. 4.00 d. 6.67

+5
Answers (1)
  1. 18 February, 11:04
    0
    Option (D) is correct.

    Explanation:

    EBIT (balance) = Net income + interest expense + tax expense

    = $150,000 + $30,000 + $20,000

    = $200,000

    Earning before taxes = EBIT (balance) - interest

    = $200,000 - $30,000

    = $170,000

    Net income = Earning before taxes - tax expense

    = $170,000 - $20,000

    = $150,000

    Times interest earned = EBIT : Interest

    = $200,000 : $30,000

    = 6.67
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “In a recent year, Day Corporation had net income of $150,000, interest expense of $30,000, and tax expense of $20,000. What was Day ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers