YEAR 4 2.6 1.0 .5 3.0 Revised EBIT (SM) Depreciation Existing Interest 4.2 5.5 1.0 .5 6.0 .5 .5 .5 The first financing alternative is a $5.0 million bank loan. The debt would require annual interest payments of 5% of the year's beginning balance. Annual principal payments of $1 million begin on the first day of Year 3. Under this financing arrangement, what would be the interest coverage in Year 1? Round your answer to the nearest two decimal places limes Submit No, that's not it. The answer is the EBIT of 2.6+the interest of $400,000 divided by the existing interest plus the incremental interest. Thus, 2.6+41.54 3.0/.9-3.33 Click next to continue open formula close formula PreviouS Next