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Management Studies

Q. Lever Age pays an 8 percent coupon on outstanding debt with face value $10 million. The organization's EBIT was $1 million.

1. Illustrate what is times interest earned?

2. If depreciation is $200,000, illustrate what is cash coverage?

3. If the organization must retire $300,000 of debt for the sinking fund each year, illustrate what is its "fixed payment cash coverage ratio" (the ratio of cash flow to interest plus other fixed debt payments)?

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Business Management, Management Studies

Category:- Business Management
Reference No.:- M9358969

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