A credit agreement requires a minimum EBITDA/interest coverage ratio of 3.5x. In the most recent fiscal year, the company reported EBITDA of $21 million and interest expense of $6 million. Which statement is accurate?

1. AThe company is not in compliance with the covenant
2. BThe company is in compliance with the covenant✓ Correct answer
3. CThe company is compliant only if interest expense is reduced
4. DCovenant compliance cannot be determined without more information

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