A) 6 times
B) 8.8 times
C) 11 times
D) 4 times
Correct Answer: B
Solution :
[b] Hint: Profit before interest and tax = \[\frac{2,10,000\times 100}{~~ 60}\] =Rs. 3,50,000 |
15% debenture interest = Rs. 45,000 |
Profit before interest and tax |
=3,50,000 + 45,000 = Rs. 3,95,000 |
Interest Coverage Ratio = \[\frac{Profit before Interest and Tax}{~~ Fixed Interest Charge}\] |
= \[\frac{3,95,000}{~~ 45,000}\]=8.8 times |
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