The management of National Utility Company has applied for a $550,000 commercial loan to purchase additional leased vehicles for its expanding business. The commercial loan office has requested and received the following itemized financial information to perform the due diligence:

The company generates Earnings Before Interest, Taxes, Depreciation & Amortization of $750,700

The company pays $85,000 in taxes for the current year

The company pays annual interest expense of $95,000 on its loans

The company spends $10,000 annually to replace some of its Property, Plants, and Equipments

The company pays annual lease principal payments of $110,000

The company pays monthly lease payments of $3,000 for its fleet of vehicle

a. Please calculate the Fixed-Charged Coverage (show your work for full points) (35%)

b. Should the loan officer approve the loan request? Please explain (15%)