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Home / Questions / The Morris Corporation has $600,000 of debt outstanding, and itpays an interest rate of 8

The Morris Corporation has $600,000 of debt outstanding, and itpays an interest rate of 8

The Morris Corporation has $600,000 of debt outstanding, and itpays an interest rate of

8% annually. Morris’s annual sales are $3 million, its averagetax rate is 40%, and its net

profit margin on sales is 3%. If the company does not maintain aTIE ratio of at least 5 to 1,

then its bank will refuse to renew the loan and bankruptcy willresult. What is Morris’s

TIE ratio?

MUST BE DONE IN EXCEL FORMAT

Dec 01 2019 View more View Less

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