Problem 9-5A Computing and analyzing times interest earned LO A1 [The following information applies to...
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Problem 9-5A Computing and analyzing times interest earned LO A1 [The following information applies to the questions displayed below.] Shown here are condensed income statements for two different companies (both are organized as LLCs and pay no income taxes). Miller Company Sales $ 1,000,000 Variable expenses (80%) 800,000 Income before interest 200,000 Interest expense (fixed) 60,000 Net income $ 140,000 Weaver Company Sales $ 1,000,000 Variable expenses (60%) 600,000 Income before interest 400,000 Interest expense (fixed) 260,000 Net income $ 140,000 1.Compute times interest earned for Miller Company. 2.Compute times interest earned for Weaver Company. 3.What happens to each companys net income if sales increase by 30%? 4. What happens to each companys net income if sales increase by 50% 5.What happens to each companys net income if sales increase by 80%? 6.What happens to each companys net income if sales decrease by 10%? 7. What happens to each companys net income if sales decrease by 20%? 8.What happens to each companys net income if sales decrease by 40%?
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