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Below is information for year ended 12/31/00 for Company A and Company B. Use this information to solve the Questions 1, 2, 3, and 4

Below is information for year ended 12/31/00 for Company A and Company B. Use this information to solve the Questions 1, 2, 3, and 4 below: ---Company A--- Interest expense: $ 400 Tax expense (40%): $ 400 Net income: $ 600 Total assets 12/31/02: $ 10,000 Total debt: $ 5,000 Equity: $ 5,000 ---Company B--- Interest expense: $ 0 Tax expense (40%): $ 400 Net income: $ 600 Total assets 12/31/02: $ 10,000 Total debt: $ 0 Equity: $ 10,000 4. Company B has operating leases with a present value of $2,000 when future minimum lease payments are discounted at 9% as of 12/31/01. Times interest earned ratio, after necessary adjustments, for Company B is: A) 10.26 B) 9.26 C) 6.56 D) 5.55

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