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allsm [11]
3 years ago
12

A company has sales of $1,250,000, cost of goods sold of $750,000, depreciation expenses of $250,000 and interest expenses of $5

5,000. If the company’s tax rate is 34%, what is this firm’s net profit?
Business
1 answer:
ivann1987 [24]3 years ago
7 0
<h2>Gross Profit = 500,000   (Sales -COGS)</h2><h2>Net Profit = Gross Profit - Indirect exp- Dep)</h2><h2>                  =  500,000-55,000 -250,000</h2><h3>                        =  195,000</h3><h2>Tax = 66,300</h2><h2>Net Profit After TAX = NPBT- Tax</h2><h2>                         = 195,000- 66,300 = 128,700</h2>

Explanation:

Sale -Cost of goods Sold = Gross Profit

1,250,000-750,000 = 500,000

Net profit = Gross Profit - Indirect Exp - Depreciation)  

                 =  500,000-55,000 -250,000

                 =  195,000

Tax = 195,000 x 34/100

      = 66,300      

NPAT = NPBT - tax  

195,000-66,300 = 128,700

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