Answer:
a. 2.18 times
b. 2.51 times
Explanation:
Missing question "a. What is its times interest earned? (Round your answer to 2 decimal places.) Times interest earned b. If depreciation is $290,000, what is its cash coverage? (Round your answer to 2 decimal places.) Cash coverage ratio"
a. Interest = Face Value * Rate of interest
Interest = $10.9 million * 8%
Interest = $872,000
Times interest earned = EBIT / Interest
= $1.9 million / $872,000
= 2.18 times
b. Cash coverage = (EBIT + Non Cash expenses) / Interest expenses
= ($1.9 million + $290,000) / $872,000
= $2.19 million / $872,000
= 2.51 times
