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The Morris Corporation has $800,000 of debt outstanding, and itpays an interest rate of 10% annually. Morris's annual sales are $4million, its average tax rate is 30%, and its net profit margin onsales is 3%. If the company does not maintain a TIE ratio of atleast 5 to 1, its bank will refuse to renew the loan and bankruptcywill result. What is Morris's TIE ratio? Do not round intermediatecalculations. Round your answer to two decimal places.
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