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The Morrit Corporation has $600,000 of debt outstanding, and it pays an interest rate of 8% annually. Morrits annual sales are $3 million, its average

The Morrit Corporation has $600,000 of debt outstanding, and it pays an interest rate of 8%

annually. Morrits annual sales are $3 million, its average tax rate is 25%, and its net profit

margin on sales is 3%. If the company does not maintain a TIE ratio of at least 5 to 1, then

its bank will refuse to renew the loan, and bankruptcy will result. What is Morrits TIE ratio?

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