Question1. Chick's Chicken has average accounts receivable of 6,333 dollar. Sales for the year were $9,800. Calculate its average collection period?
Question2. Lever age pays an 8 percent rate of interest on 10 million dollar of outstanding debt with face value 10 million dollar. The firm's EBIT was $1 million.
[A] Find times interest earned?
[B] If depreciation is $200,000, determine cash coverage?
[C] If the firm must retire $300,000 of debt for the sinking fund each year, determine its "fixed payment cash coverage ratio" [the ratio of cash flow to interest plus other fixed debt payments]?