What is its times-interest-earned ratio

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1. Graser Trucking has $16 billion in assets, and its tax rate is 30%. Its basic earning power (BEP) ratio is 12%, and its return on assets (ROA) is 5%. What is its times-interest-earned (TIE) ratio? Round your answer to two decimal places.

2. You just sold a car to your nephew, and he has promised to make the following payments to you: $1,000 at the end of Year 1, $2,000 at the end of Year 2, $2,000 at the end of Year 3, and $3,000 at the end of Year 4. If the going rate of interest to purchase used cars is 7.5%, what is the effective price you are charging your nephew for the car?

Reference no: EM131826184

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