1. Cougar Gold Company provides you with the following financial information:

Sales	$200,000
Cost of Goods Sold	(120,000)
Gross Profit	$80,000
Operating Expenses	(50,000)
Interest Expense	(5,000)
Income Tax Expense	(5,000)
Net Income	$20,000

Cougar Gold is looking to calculate its Times Interest Earned Ratio (TIE Ratio) and provide the correct interpretation to its shareholders. Which of the following should Cougar Gold provide to its stockholders?

A. TIE Ratio = 4.00; Can pay our interest 4 times using Net Income

B. TIE Ratio = 5.00; Can pay our interest 5 times using Income before Interest

C. TIE Ratio = 5.00; Can pay our interest 5 times using EBIT

D. TIE Ratio = 6.00; Can pay our interest 6 times using EBIT

E. TIE Ratio = 6.00; Can pay our interest 6 times using Net Income