This question is based on the 10 K for Xerox which was filed on Feb 28, 2020. The company's $1.8 billion unsecured revolving credit facility contains a number of covenants. The are

a) Maximum leverage ratio as defined of 4.25

b) A minimum interest coverage ratio defined of not less than 3.00

Holding all things equal determine if they would be compliant if net income dropped by 25% or 40%. (Show work).

How much would income need to decline to cause a violation of these covenants? (Show work)