18. Leverage Ratios. Lever Age pays an 8% rate of interest on $10 million of outstanding debt with face value $10 million. The firm's EBIT was $1 million. (LO3)

a. What is times interest earned?

b. If depreciation is $200,000, what is cash coverage?

c. If the firm must retire $300,000 of debt for the sinking fund each year, what is its "fixed- payment cash-coverage ratio" (the ratio of cash flow to interest plus other fixed debt payments)?