1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Kitty [74]
3 years ago
7

INCOME STATEMENT Little Books Inc. recently reported $3 million of net income. Its EBIT was $6 million, and its tax rate was 40%

. What was its interest expense? [Hint: Write out the headings for an income statement and fill in the known values. Then divide $3 million of net income by (1 - T) = 0.6 to find the pretax income. The difference between EBIT and taxable income must be the interest expense. Use this same procedure to complete similar problems.]
Business
1 answer:
Papessa [141]3 years ago
7 0

Answer:

Interest= $1000000

Explanation:

The general structure of an income statement proceeds as follow:

Revenue/Sales (+)

Cost of Goods Sold (COGS) (-)

=Gross Profit

Marketing, Advertising, and Promotion Expenses (-)

General and Administrative (G&A) Expenses (-)

=EBITDA

Depreciation & Amortization Expense (-)

=Operating Income or EBIT

Interest (-)

Other Expenses (-)

=EBT (Pre-Tax Income)

Income Taxes (-)

=Net Income

<u>In this exercise:</u>

EBIT= $6000000

interest= ?

tax=? (0,40)

EBITDA=$3000000

interest= [EBITDA/(1-t)]-EBIT

interest=3000000/0,60-6000000=-$1000000

EBIT= 6million

Interest= 1million

Tax=2million (EBIT-interest)*0,40

Net income=3million

You might be interested in
A colleague from the plant in Germany has arrived at the Chicago plant to share insights on a recent product line changeover imp
tester [92]

Answer: jim already had a rigid opinion about what will work in the United States .

Superiority complex on the side of Jim.

Language barrier.

He is not impressed by the German outlook and dressing

Explanation:there are several barriers that may hinder the successful implementation of the new product line which has saved thousand of euros for the Germans,one is the fact that Mr jim already has a predisposed idea that the implementation will not work one can only wonder why he invited the German in the first place,it's obvious that the invitation if the German came from a higher pedestal and could be one if the reason Mr jim believes contrarily ,he believes innovation will not work in the USA,meanwhile ,world over , workers tend to resist change and innovation but there are a lot of measures to bring them to the table which include engaging them in every stageof the implementation , assuring them that there will be no job loss due to innovation,making them to see the advantages of the proposed changes to all.

The feeling of superiority to the Germans and their technology is very obvious ,ranging from the quiet disparaging of the visitors accent and pronounciation ,condemn his outfit rather than concentrating on what he has to offer ,he has a set mind ,which find everything about the Germans repulsive.it will be difficult to adopt the new technology with Jim at the helm of affairs at the Chicago plant .

7 0
3 years ago
Abigail and Darcy are married. In 2017 they sold there home, which they had purchased in 2012, and lived in it since 2013. They
iris [78.8K]

Answer:

<u>$485,000</u>

Explanation:

Initial cost of home= $270,000+$45,000= $315,000.

Recognized gain= $800,000 - $315,000 = $485,000.

Remember, it was mentioned that Abigail and Darcy immediately purchased another home for $800,000. Very likely this money was derived from the first and only home they ever sold.

Therefore, their recognized gain after substracting the cost is $485,000.

7 0
3 years ago
A Samoan handicraft company is expanding its market into Australia and New Zealand. The company's director of marketing is resea
Flura [38]

Answer:

Both A) and B)

Explanation:

Samoa is a very small country that consists of two islands, and its population is less than 200 thousand. New Zealand and Australia are therefore, massive countries compared to Samoa, with very different cultures.

The Samoan marketing director should research the geography of New Zealand and Australia because it is very different from Samoan geography. He should also complete a demographic analysis (income bracket, gender, and age fall under this category) in order to profile possible customers.

Finally, cultural aspects and rituals such as those described in point B should also be explored in order to know what to expect from local clients, providers, and business partners, and also, in order to know how to advertise the services. (culture is a crucial factor in determining the type of advertising a company employs).

3 0
3 years ago
After reading this​ chapter, it​ isn't surprising that​ you're becoming an investment wizard. With your newfound​ expertise, you
Nimfa-mama [501]

Answer:

before-tax 29.87%

after-tax     26.37%

Explanation:

The return will be the capital gain and the dividend gain.

<u>capital gain:</u> ending market price - purchase price

$ 40.07 - $ 31.17 = $ 8.90

<u>dividend gain:</u>   $0.41

<u><em>total return:</em></u> $8.90 + $0.41 = $9.31

<em>investment:</em> $ 31.17

rate of return before-tax:  9.31 / 31.17 = 0,29868 = 29.87%

<em><u>return after tax:</u></em>

dividends 0.41 x ( 1 - 0.25) = 0.3075

capital gain: (as we hold the share we can use long.term capital gain rate

9.31 x ( 1 - 0.15) = 7,9135

total return: 7.9135 + 0.3075 = 8.221

rate of return after-tax 8.221 / 31.17 = 0,2637471928136 = 26.37%

7 0
3 years ago
Carlos has a small fashion company. He has been in business for a little over a year and the company looks like it is going to d
melisa1 [442]

Answer:

1.Venture capital firm

Explanation:

Since the given statements, it is clear that CARLOS is an emerging firm that is doing good and needs a little bit of support financially to keep up with the demand.

Venture capital funding will be the best option for the company Carlos

Because in venture capital funding the fund is for the companies that are in their early-stage, emerging or that has the potential for better growth

Carlos as we see, it has growth potential and it is emerging too.

An initial stock offering is only done by the stock market listed companies and in the given statement it is nowhere given that Carlos is a listed company in new york stock exchange or any other.

So the answer is option 1

8 0
3 years ago
Other questions:
  • The Palace Hotel Group purchased Orange Roof Hotels for an estimated value of $120 billion. All the hotels previously owned by O
    15·2 answers
  • A condition in a contract for the purchase of real property which makes the purchaser's obligation dependent upon his obtaining
    12·1 answer
  • Land, Labor and Entrepreneurship are all of the factors of production.
    5·1 answer
  • Which of the following is a reason for this resurgence in federal government budget​ deficits?
    5·1 answer
  • 3. A company manufactures two types of products: A and B. Three resources R1, R2, and R3 are required to make these products. a.
    11·1 answer
  • Magical Productions is a large production company that controls a major portion of the television industry's market share along
    7·1 answer
  • As a finance major student of the UWI OC, you have just landed a lucrative job as a Financial
    14·1 answer
  • The following data is available for Everest Company:
    13·1 answer
  • Which of the following is NOT one of the 5 major flows in any supply chain?
    14·2 answers
  • NbADBGLKvb.ka Dvhb.wrkbvkrh.hbk.cS
    10·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!