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8. Morrey Co. has $600,000 of debt outstanding, and it pays 8% interest rate annually. Their sales are $3million, tax rate at 40%, and the

8. Morrey Co. has $600,000 of debt outstanding, and it pays 8% interest rate annually. Their sales are $3million, tax rate at 40%, and the

profit margin is 3%. If the company doesn't maintain a TIE of at least 5/1, the bank will refuse to renew the loan and bankruptcy will

result. What is the TIE ratio?

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