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18 ABC Co. is a private company. Bank NTBig has made a loan to ABC CO. ABC is required to maintain a minimum 2.0 interest
18
ABC Co. is a private company. Bank NTBig has made a loan to ABC CO. ABC is required to maintain a minimum 2.0 interest coverage ratio. In its most recent financial reports, ABC reported earnings before interest and taces of $1.200 and interest expense of $600. In the report's notes, the company discloses that it changed the estimated useful life of its property, plant, and equipment during the year. Depreciation was approximately $150 lower as a result of this change in estimate. What should be the true interest coverage ratio? 185 1.75 1.95 165 Step by Step Solution
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