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thanks! A firm is considering adding to its debt by borrowing $2 million at an annual interest rate of 8%. Assume that before considering this
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A firm is considering adding to its debt by borrowing $2 million at an annual interest rate of 8%. Assume that before considering this capital restructuring, the firm has total debt of $6 million at an annual interest rate of 5% and annual depreciation expense of $500,000 Assuming EBIT of $900,000 what is this company's cash coverage ratio (a) before, and (b) after the proposed restructuring? A. 4.67 3.04 B. 3.00 1.96 C. 1.96, 3.00 D. 3.04 4.67Step by Step Solution
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