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In 2014, P Co Reported Net Earnings of $1,933 Million

Question 3

Multiple Choice

In 2014, P Co reported net earnings of $1,933 million, interest expense of $395 million and income taxes of $270 million. In 2013, they reported net earnings of $2,142 million, interest expense of $478 million and income taxes of $818 million. Calculate the times interest earned ratio for 2014 and 2013, respectively.


A) 6.05 and 5.48 times
B) 5.05 and 4.48 times
C) 5.73 and 6.19 times
D) 6.58 and 7.19 times

Correct Answer:

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