Question

Simplex Healthcare had net income of $5,411,623 after paying taxes at 34 percent. The firm had revenues of $20,433,770.Its interest expense for the year was $1,122,376, while depreciation expense was $2,079,112. What was the firm's operating expenses excluding depreciation? (Round your intermediate calculations and final answer to the nearest dollar.)

Answer 1

Answer:

$9,032,853

Explanation:

Given:

Net income = $5,411,623

Taxes rate = 34% = 0.34

Revenues = $20,433,770

Interest expense for the year = $1,122,376

Depreciation expense = $2,079,112

Now,

Earnings before taxes (EBT) = $\frac{\textup{Net income}}{\textup{1-tax rate}}$

or

Earnings before taxes (EBT) = $\frac{\textup{5,411,623}}{\textup{1-0.34}}$

or

Earnings before taxes (EBT) = $8,199,428.78

EBIT = Earnings before taxes + Interest expenses

or

EBIT = $8,199,428.78 + $1,122,376

or

EBIT = $9,321,804.78

EBITDA = EBIT + Depreciation expense

or

EBITDA = $9,321,804.78 + $2,079,112

or

EBITDA = $11,400,916.78

Therefore,

The operating expenses = Revenue - EBITDA

or

The operating expenses = $20,433,770 - $11,400,916.78

or

The operating expenses = $9,032,853.22 ≈ $9,032,853