Sheehan, Inc provides the following income statement for 2017
Net Sales $240,000
Cost of Goods Sold 110,000
Gross Profit $130,000
Operating Expenses:
Selling Expenses 45,000
Administrative Expenses 12,000
Total Operating Expenses 57,000
Operating Income $73,000
Other Revenues and (Expenses):
Loss on Sale of Capital Assets (27,000 )
Interest Expense (1,000 )
Total Other Revenues and (Expenses) (28,000 )
Income Before Income Taxes $45,000
Income Tax Expense 5,300
Net Income $39,700
Calculate the times-interest-earned ratio. (Round your answer to two decimal places.)
A) 73.00 times
B) 45.00 times
C) 39.70 times
D) 46.00 times
D .D)
Times-interest-earned ratio = (Net income + Income tax expense + Interest expense) / Interest expense = ($39,700 + 5,300 + 1,000 ) / 1,000 = 46.00 times
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A) focusing B) projecting C) probing D) none of the above
An industry study was recently conducted in which the sample correlation between units sold and marketing expenses was 0.57. The sample size for the study included 15 companies
Based on the sample results, test to determine whether there is a significant positive correlation between these two variables. Use an alpha = 0.05A) Because t = 2.50 > 1.7709, do not reject the null hypothesis. There is not sufficient evidence to conclude there is a positive linear relationship between sales units and marketing expense for companies in this industry. B) Because t = 2.50 > 1.7709, reject the null hypothesis. There is sufficient evidence to conclude there is a positive linear relationship between sales units and marketing expense for companies in this industry. C) Because t = 3.13 > 1.7709, do not reject the null hypothesis. There is not sufficient evidence to conclude there is a positive linear relationship between sales units and marketing expense for companies in this industry. D) Because t = 3.13 > 1.7709, reject the null hypothesis. There is sufficient evidence to conclude there is a positive linear relationship between sales units and marketing expense for companies in this industry.