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Alexxandr [17]
3 years ago
8

Molteni Motors Inc. recently reported $3.5 million of net income. Its EBIT was $5.25 million, and its tax rate was 30%. What was

its interest expense? (Hint: Write out the headings for an income statement and then fill in the known values. Then divide $3.5 million net income by 1 − T = 0.7 to find the pre-tax income. The difference between EBIT and taxable income must be the interest expense.) Round your answer to the nearest dollar. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000.
Business
1 answer:
Hatshy [7]3 years ago
7 0

Answer:

$250,000

Explanation:

The computation of the interest expense is shown below:

Given that

Net Income = $3,500,000

Tax rate = 30%

EBIT = $5,250,000

As we know that

EBT = EBIT - Interest Expense

So,

Interest expense = EBIT - EBT

where,

EBT = Net Income ÷ (1 -Taxes)

= $3,500,000 ÷ ( 1 - 30%)

= $5,000,000

And, the EBIT is $5,250,000

So, the interest expense is

= $5,250,000 - $5,000,000

= $250,000

We simply applied the above formula

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Answer:

$4,750

Explanation:

The computation of the depreciation expense is shown below:

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Now put these values to the above formula

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3 years ago
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Based on the information in the question, the coverage become effective on January 26 which was the day the policy was delivered and the first premium was collected.

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Answer:

<u>A) conditions in the target industry allow for profits and return on investment that is equal to or better than that of the company's present business(es).</u>

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Thus, any company wanting to test this out would consider whether conditions in the target industry allow for profits and return on investment that is equal to or better than that of the company's present business(es).

This option is better because improved profits implies better shareholder value.

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Answer:

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