Times-Interest-Earned Ratio The Morrit Corporation has $1,200,000 of debt outstanding, and it pays an interest rate of 9

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answerhappygod
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Times-Interest-Earned Ratio The Morrit Corporation has $1,200,000 of debt outstanding, and it pays an interest rate of 9

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Times-Interest-Earned Ratio
The Morrit Corporation has $1,200,000 of debt outstanding, and
it pays an interest rate of 9% annually. Morrit's annual sales are
$6 million, its average tax rate is 25%, and its net profit margin
on sales is 3%. If the company does not maintain a TIE ratio of at
least 4 to 1, then its bank will refuse to renew the loan, and
bankruptcy will result. What is Morrit's TIE ratio? Do not round
intermediate calculations. Round your answer to two decimal
places.
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