* Times interest earned Loomis, Inc. reported the following on the companys income statement in two recent...
Question:
*
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?
*
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%?
Corporate Financial Accounting
ISBN: 978-1133952411
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac