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What is pickett''s tie ratio

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The H. R. Pickett Corporation has $500,000 of debt outstanding, and it pays an interest rate of 10 percent annually: Pickett's annual sales are $2 million, its average tax rate is 30 percent, and its net profit margin on sales is 5 percent. If the company does not maintain a TIE ratio of at least 5 times, its bank will refuse to renew the loan, and bankruptcy will result. What is Pickett's TIE ratio?

Reference no: EM131102424

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