In the recent year Hill Corporation had net income of $210,000, interest expense of $50,000, and...

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In the recent year Hill Corporation had net income of $210,000, interest expense of $50,000, and...

In the recent year Hill Corporation had net income of $210,000, interest expense of $50,000, and tax expense of $90,000. What was Hill Corporation's times interest earned for the year?

Group of answer choices

$1,000,000

$1,350,000

$1,200,000

None of these answers are correct.

business accounting

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Answer 1

Answer #1

Answer

Times Interest earned = Net Income before interest and taxes / Interest expense

= ($210000 + 50000 + 90000) / $ 50000
= 350000 / 50000
= 7 times

Correct Answer = none of these answers are correct. Times interest earned is calculated in ‘times’ and not in “$”.

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Answer 2

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