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Product Line Inc What Is the Interest Coverage for Product Line Inc

Question 75

Multiple Choice

Product Line Inc.has the following data: 2×132×122×11 Sales (all credit sales)  $800$740$675 Less: Cost of Goods Sold 525490450 Grosi Profit $275$250$225 Less: Operating Expenses 150140125 Operating Income $125$110$100 Less: Other Expense: Interest 1085 Income before Tax $115$102$95 Less: Income Tax Expense 514643 Net Income $64$56$52\begin{array} { l l l l } & \underline { 2 \times 13 } & \underline { 2 \times 12 } & \underline { 2 \times 11 } \\\text { Sales (all credit sales) } & \$ 800 & \$ 740 & \$ 675 \\\text { Less: Cost of Goods Sold } & \underline { 525 } & \underline { 490 } & \underline { 450 } \\\text { Grosi Profit }& \$ 275 & \$ 250 & \$ 225 \\ \text { Less: Operating Expenses } & \underline { 150 } & \underline { 140 } & \underline { 125 } \\\text { Operating Income }& \$ 125 & \$ 110 & \$ 100 \\\text { Less: Other Expense: Interest } & \underline { 10 } & \underline { 8 } & \underline { 5 } \\\text { Income before Tax }& \$ 115 & \$ 102 & \$ 95 \\\text { Less: Income Tax Expense } & \underline { 51 } & \underline { 46 } & \underline { 43 } \\\text { Net Income }& \underline { \$64 } & \underline { \$56 }& \underline { \$52 } \\\end{array} What is the interest coverage for Product Line Inc.in 2X13? Has the interest coverage improved or not improved since 2X12?


A) 12.5,not improved
B) 6) 4,not improved
C) 11.5,improved
D) 12.5,improved
E) 6) 4,improved

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