MEGAFRAME COMPUTER COMPANY
Balarce Sheet
as of Decermber 31 MEGAFRAME COMPUTER COMPANY
Income Statement
for the Year Ended Decernber

MEGAFRAME COMPUTER COMPANY
Balarce Sheet
As of Decermber 31
$\begin{array}{lr}\text { ASSETS } \\\text { Cash } & \$ 50,000 \\\text { Accounts receivable } & 70,000 \\\text { Inventory } & 110,000 \\\text { Net plant and equipment } & 220,000\\\text { Total assets }&\$450,000\\\\\text { LIABIITES AND STOCKHOLDERS' EQUTTY }\\\text { Accounts payable } & \$ 0,000 \\\text { Accrued expenses } & 50,000 \\\text { Long-term debt } & 130,000 \\\text { Common stock } & 70,000 \\\text { Paid-in capital } & 40,000 \\\text { Retained earnings } & 90,000\\\text { Total liabilities and stockholders' equity }&\$450,000\end{array}$
MEGAFRAME COMPUTER COMPANY
Income Statement
For the year ended Decernber 31
$\begin{array}{ll}\text {Sales (all on credit) }&\$875,000 \\\text { Cost of goods sold}&600,000 \\\text {Gross profit }& \$275,000\\\text { Sales and administrative expenses}&30,000 \\\text {Depreciation }&55,000 \\\text { Operating profit}&\$190,000 \\\text {Interest expense }&25,000 \\\text {Profit before taxes }&\$165,000 \\\text { Taxes \( (30 \%) \) }&49,500 \\\text { Net income}& \$115,500\\\end{array}$

Refer to the tables above. Times interest earned for Megaframe Computer is ________.

A) 3.8x
B) 4.6x
C) 11x
D) 7.6x