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Net profit after tax is Rs. 60,000, tax rate 40%, interest on debt Rs. 1,50,000. What is the interest coverage?
A0.4 times
B1.67 times
C2.5 times
D4 times
Answer & Solution
Correct answer: B. 1.67 times
Profit before tax is 1,00,000, so PBIT is 2,50,000 and 2,50,000 divided by 1,50,000 is 1.67.
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