How has financial analysis impacted the renovation decision

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An assisted living center administrator has determined that a renovation of the rehabilitation center will increase the profitability of the organization. Although interest expense will increase 80% from $200,000, the annual net income after renovation is projected to be one million dollars from the previous year's $400,000 profit. The times interest earned ratio industry standard is 3.25.

Question 1: How has the financial analysis impacted the renovation decision?

Reference no: EM132569535

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