Shown here are condensed income statements for two different companies (assume no income taxes).

Blanca Company
Sales	$ 2,250,000
Variable expenses (80%)	1,800,000
Income before interest	450,000
Interest expense (fixed)	80,000
Net income	$ 370,000

Negra Company
Sales	$ 2,250,000
Variable expenses (60%)	1,350,000
Income before interest	900,000
Interest expense (fixed)	530,000
Net income	$ 370,000

1. Compute times interest earned for Blanca Company and Negra Company.

2. What happens to each company's net income if sales decrease by 40%?

3. Which company would have a greater ability to pay interest expense if sales were to decrease?