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    • Question

      If the Interest Coverage Ratio of a project is 4.0 and

      the EBIT is ₹8,00,000, what is the interest expense? 
      A ₹32,00,000 Correct Answer Incorrect Answer
      B ₹2,00,000 Correct Answer Incorrect Answer
      C ₹4,00,000 Correct Answer Incorrect Answer
      D ₹1,50,000 Correct Answer Incorrect Answer
      E ₹2,50,000 Correct Answer Incorrect Answer

      Solution

      ICR = EBIT Interest. Therefore, Interest = EBIT/ICR. Interest = 8,00,000/4 = 2,00,000.

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