Standard inc. has an annual interest expense of $40,000. if standard's times-interest-earned ratio is 3.0, what is standard's earnings before taxes (ebt) ? select one:

a. $160,000

b. $80,000

c. $47,000

d. $120,000

Hello!

Time interest earned ratio=income before tax and interest expenses:interest expenses

3=X:40000

Solve for x

X=3*40000

X=120000 This is income before tax and interest expenses but we need to figure out earning before tax only as required so

Earning before tax=120,000-40,000

=80,000. Answer

Good luck!