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Times interest earned

Loomis, Inc. reported the following on the company’s income statement in two recent years:

	Current Year		Prior Year
Interest expense	$499,000		$598,800
Income before income tax expense	7,335,300		7,904,160

a.   Determine the times interest earned ratio for the current year and the prior year. Round to one decimal place.

Current year
Prior year

b.   Is the number of times interest charges are earned improving or declining?
 

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Present Value of an Annuity

On January 1, you win $60,000,000 in the state lottery. The $60,000,000 prize will be paid in equal installments of $6,000,000 over 10 years. The payments will be made on December 31 of each year, beginning on December 31 of the current year. If the current interest rate is 10%, determine the present value of your winnings. Use Table 3 and Table 4. Round to the nearest whole dollar.
$

Will the present value of your winnings using an interest rate of 10% be more than the present value of your winnings using an interest rate of 6%?