Calculate the morrit tie ratio

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Question - The Morrit Corporation has $960,000 of debt outstanding, and it pays an interest rate of 9% annually. Morrit's annual sales are $6 million, its average tax rate is 25%, and its net profit margin on sales is 6%. If the company does not maintain a TIE ratio of at least 5 to 1, then its bank will refuse to renew the loan, and bankruptcy will result. Calculate the Morrit's TIE ratio?

Reference no: EM133116066

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