Answer:
Earnings Before Tax (EBT) = $16,000,000
Interest expense = $12,600,000
Explanation:
Earnings Before Tax (EBT) = Net Income / (1 - Tax Rate)
Earnings Before Tax (EBT) = $12,000,000 / ( 1 - 0.25)
Earnings Before Tax (EBT) = $12,000,000 / 0.75
Earnings Before Tax (EBT) = $16,000,000
Interest expense = Earnings Before Interest and taxes (EBIT) - Earnings Before taxes (EBT)
Interest expense = $28,600,000 - $16,000,000
Interest expense = $12,600,000
Income Statement
Details Amount
EBIT $28,600,000
Less: Interest expenses <u>$12,600,000</u>
EBT $16,000,000
Tax at 25% <u>$4,000,000</u>
Net Income $12,000,000
