Which of the following statements is correct?

(x) The fixed charge coverage ratio measures the number of dollars of operating earnings available to meet the firm's interest dollars and other fixed charges.

(y) If the cash coverage ratio is less than 1, then the firm has less than $1 of cash available to pay each dollar of interest or fixed-charge obligations.

(z) Times interest earned ratio measures the number of dollars of operating earnings available to meet each dollar of interest obligations on the firm's debt.

A. (x), (y) and (z)

B. (x) and (y) only

C. (x) and (z) only

D. (y) and (z) only

E. (x) only

12. A firm has EBIT of $300,000 and depreciation expense of $160,000. Fixed charges total $146,000. Interest expense totals $27,000 and taxes equal $54,000. What is the firm's cash coverage ratio?

A. 2.79 times

B. 3.15 times

C. 3.36 times

D. 3.82 times

E. 4.96 times

13. Which of the following statements is (are) correct?

(x) Since the accounts receivable turnover measures the same activity as the fixed asset turnover ratio they typically have the same value.

(y) In general, a firm wants a high accounts receivable turnover ratio because the firm wants to collect its accounts receivable as quickly as possible in order to reduce the cost of financing accounts receivable.

(z) If the fixed asset turnover ratio is extremely high then the firm may be close to its maximum production capacity and unable to increase production if it receives new customer orders.

A. (x), (y) and (z)

B. (x) and (y) only

C. (x) and (z) only

D. (y) and (z) only

E. (z) only

14. What is a firm's fixed asset turnover if its total assets are $180,000, current assets are $30,000, current liabilities are $44,000, sales were $200,000, and net income was $75,000?

A. 2.0 times

B. 1.7 times

C. 1.3 times

D. 1.0 times

E. 0.5 times

15. Which of the following statements is correct? (x) An extremely low average collection period will maximize net income.

(y) An extremely low average collection period is desirable for firms because it maximizes the time that the firm has to make payments on its accounts payable.

(z) An extremely high average collection period suggests that the firm is not providing customers with enough time to make payments.

A. (x), (y) and (z)

B. (x) and (y) only

C. (x) and (z) only

D. (y) and (z) only

E. None of the above