What is its fixed-payment cash-coverage ratio

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Reference no: EM13810834

Lever Age pays a(n) 9% rate of interest on $11.0 million of outstanding debt with face value $11.0 million. The firm’s EBIT was $2.0 million.

If the firm must retire $400,000 of debt for the sinking fund each year, what is its “fixed-payment cash-coverage ratio” (the ratio of cash flow to interest plus other fixed debt payments)? (Round your answer to 2 decimal places.)

Reference no: EM13810834

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