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Morris Corporation




The Morris Corporation has $1,000,000 of debt outstanding, and it pays an interest rate of 9% annually. Morris's annual sales are $5 million, its average tax rate is 30%, and its net profit margin on sales is 3%. If the company does not maintain a TIE ratio of at least 4 to 1, its bank will refuse to renew the loan and BANKRUPTCY will result. What is Morris's TIE ratio? Round intermediate calculations to two decimal places


Paper#81657 | Written in 18-Jul-2015

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