Ajax Corp's sales last year were $460,000, its operating costs were $362,500, and its interest charges were $12,500. What was the firm's times-interest-earned (TIE) ratio? Group of answer choices

the times interest ratio is 7.80

Explanation:

The computation of the times-interest earned ratio is shown below:

As we know that

Times-interest-earned (TIE) ratio is

= Earnings Before Interest and Taxes ( EBIT) ÷ Interest expense

= ($460,000 - $362,500) ÷ $12,500

= 7.80

Hence, the times interest ratio is 7.80

We simply applied the above formula so that the correct value could come

And, the same is to be considered

if you use only 25 for your entertainment and only 200 for the groceries that you really need and take out the 50 per month for the computer then that should be enough