Choose the correct multiple choice

1 Cottage Inc. has total interest charges of $20,000 per year. Sales of $2 million generated an operating income of $240,000 and a net profit of $200,000. The firm has a marginal tax rate of 25%. What is the firm's times-interest-earned ratio?

a 10

b 11

c 12

d 13

2 Assume a firm has the following balance sheet statement items: total current liabilities of $645,000; total assets of $2,350,000; fixed assets of $1,135,000; and long-term debt of $250,000. What is the amount of the firm's net working capital?

a $395,000

b $320,000

c $570,000

d Answer not shown