Answer:
C. 7.4
Step-by-step explanation:
Computation for the times interest earned ratio for the year
First step is to get the EBIT
Net income $42,000
Add Income tax expense $33,000
Add Interest expense $10,800
EBIT $85,800
Now let Compute the times interest earned ratio for the year using this formula
Times interest earned ratio=EBIT/Interest expense
Let plug in the formula
Times interest earned ratio=$85,800/$10,800
Times interest earned ratio=7.94
Therefore the times interest earned ratio for the year will be 7.94