Last year the company realized $14,000,000 in operating income (EBIT). Its annual interest expense is $1,500,000. What was the company's net income for the year? O a. $9.375,000 O b. $11,625,000 O c. $3,125,000 O d. $12.500,000 O e. $10,500,000

Last year the company realized $14,000,000 in operating income (EBIT). Its annual interest expense is $1,500,000. What was the company's net income for the year? O a. $9.375,000 O b. $11,625,000 O c. $3,125,000 O d. $12.500,000 O e. $10,500,000

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 9MC: A company has pre-tax or operating income of $120,000. If the tax rate is 40%, what is the companys...

See similar textbooks

Related questions

Q: You invest $1,500 in VZ, $2,700 in KO, and $1,800 in BP. If VZ goes up 4%, KO goes up 3%, and BP…

A: The objective of the question is to calculate the return of the portfolio given the individual…

Q: Problem 13-19 Reward-to-Risk Ratios [LO4] Stock Y has a beta of 1.4 and an expected return of 15.2…

A: Variables in the question:Stock Y:Beta=1.4Expected Return=15.2%Stock Z:Beta=.7Expected…

Q: it of What is considered a summary of profit or loss? Select one: a. Retained earnings b.…

A: The correct answer to the question is "C. Income Statement"Income statement is considered as summary…

Q: Kiara invested $2,000 at the beginning of every 6 months in an RRSP for 11 years. For the first 8…

A: Future value can be calculated usingFV (rate, nper, pmt, [Pv], [type])Rate The interest rateNper…

Q: Beyer Company is considering buying an asset for $250,000. It is expected to produce the following…

A: The payback period refers to the number of years it takes for the project to break even the initial…

Q: If a project has a profitability index of 1.20, then the project's internal rate of return is O…

A: The profitability index is used to determine the attractiveness of an investment. It is computed by…

Q: You would like to estimate the weighted average cost of capital for a new airline business. Based on…

A: The average rate of return that a business is expected to pay to its investors—both debt and equity…

Q: The Jones Company has just completed the third year of a five-year MACRS recovery period for a piece…

A: The projected residual worth of an asset at the end of its useful life is referred to as salvage…

Q: 5) Suppose that zero interest rates with continuous compounding are as follows: Maturity (years)…

A: Maturity (years)Rate(% per annum)12.024.034.745.255.5

Q: A $100 000, 8% bond with semi-annual coupons redeemable at par on April 25, 2018, was purchased on…

A: Since you have posted multiple questions, as per bartleby's policy we have solved first question for…

Q: Von Bora Corporation (VBC) is expected to pay a $3.50 dividend at the end of this year. If you…

A: Expected Dividend = d = $3.50Growth Rate = g = 5%Cost of Capital = r = 11%

Q: You want a seat on the board of directors of Four Keys, Incorporated. The company has 220,000 shares…

A: Cumulative voting is a corporate voting method designed to empower shareholders by allowing them to…

Q: A company has the following information: Earnings before interest and taxes Interest expense Tax…

A: The free cash flow to equity(FCFE) is calculated using following equation

Q: Consider company Macrosoft, whose current stock price is 542. The board of directors of Macrosoft…

A: To determine the amount of cash that the investor will receive after the spin-off involving…

Q: Consider the following information: State of Economy Boom Good Poor Bust a. Probability of State- of…

A: Expected return refers to the rate of return that is being earned by investors over the amount of…

Q: a. $612.40 b. $526.00 c. $644.24 d. $653.02 e. $646.31

A: Future value of money is much more than the actual deposit due to compounding of the interest rate.

Q: Last year, you purchased 510 shares of Forever, Incorporated, stock at a price of $45.44 per share.…

A: The capital gains yield is the yield on the stock investment due to the difference in the purchase…

Q: The typical consumer's basket in the economy below consists of 10 burger and 10 orders of French…

A: The inflation rate refers to the percentage increase in the overall price level of goods and…

Q: (Equivalent annual cost calculation) The Templeton Manufacturing and Distribution Company of Tacoma,…

A: Capital budgeting:Capital budgeting is the process of planning and managing a company’s long-term…

Q: The accrual accounting rate-of-return method has a significant weakness for use in making capital…

A: The accrual accounting rate of return refers to the percentage of return that is ecpected form the…

Q: Assume that the Canada Pension Plan promises you $70,000 per year starting when you retire 45 years…

A: Social security is the amount which is given by certain employers in addition to salary that gets…

Q: asset, risky as shown below. For example, 20% in risk-free and 80% in A, or 30% in risk-free and 70%…

A: Expected rate is the rate that can be expected from a portfolio based on the composition of the…

Q: Assume the following information: You have $1,000,000 to invest Current spot rate of pound =…

Q: Leah invested $3,000 at 4.00% per annum. Calculate the amount of interest earned for 6 months. Round…

A: Simple interest is a straightforward way of computing interest on a principal sum over a specified…

Q: (Bond valuation) Five years ago XYZ International issued some 25-year zero-coupon bonds that were…

A: Bond PriceThe bond price refers to the market value of a bond, which is determined by the present…

Q: Which of the following would decrease the present value of $1,000 paid n years from today, given the…

A: Introduction: PV of a future payment of $1000 to be received n years from today, compounded m times…

Q: Bob and Angelique Mackenzie bought a property valued at $84,000 for $15,000 down with the balance…

A: Loans are paid by equal monthly payments that carry the payment for interest and payment for loan…

Q: You have $100,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to create a…

A: Investors use beta as a tool for portfolio management and risk assessment. A portfolio with a higher…

Q: Consider the following information: State of Economy Probability of State of Economy Rate of Return…

A: Here, Weights20%60%20%ABCState of…

Q: Required information Problem 9-7B Calculate the issue price of a bond and prepare amortization…

A: Price of bond is the present value of coupon payments plus present value of the face value of bond…

Q: Palmer Corporation is considering the purchase of a new plece of equipment. The cost savings from…

A: The payback period is a capital budgeting metric that evaluates the number of years it takes for the…

Q: The Garland Corporation has a bond outstanding with a $90 annual interest with semiannual payment, a…

A: The annual payments are $90 with semi-annual compounding.The face value of the bond is $1,000.The…

Q: For each of the following cases, indicate (a) to what rate columns, and (b) to what number of…

A: Both future value of annuity and present value of annuity considers compounding in its calculation.…

Q: AFN EQUATION Carlsbad Corporation's sales are expected to increase from $5 million in 2021 to $6…

A: AFN (Additional Fund Needed) is a tool businesses use to figure out the extra capital they need to…

Q: Cirice Corporation is considering opening a branch in another state. The operating cash flow will be…

A: Internal rate of return is a capital budgeting method that takes into account the initial outflow…

Q: Below is information regarding the capital structure of Micro Advantage Incorporated On the basis of…

A: Variables in the question:1) 20 year Bond: Book value=$5,000,000 Par Value=$100Coupon rate=9%Current…

Q: Consider a bond with a coupon of 4.6 percent, five years to maturity, and a current price of…

A: Here,Increase in yield = 2%To Find:Part A. New price of the bond by using duration =?Part B. New…

Q: Suppose your firm is considering investing in a project with the cash flows shown below, that the…

A: The Modified Internal Rate of Return (MIRR) is a financial metric designed to address certain…

Q: Tesla is spending $1.1 billion to build an electric truck factory in Austin. The new factory is…

A: The below item should not be included in the free cash flowThe cost of the market research study…

Q: Binford Tools has an expected perpetual EBITDA equal to $67k. Its tax rate is 35%. Binford has $139k…

A: EBITDA=$67000Debt=$139000Cost of debt=6.85%Unlevered cost of capital=10.25%Tax rate=35%

Q: Smashed Pumpkins Company paid $208 in dividends and $631 in interest over the past year. The company…

A: EBIT = [(Dividend + Increase in Retained Earnings) / (1 - tax rate)] + Interest ExpenseHere,Dividend…

Q: To remedy the traffic situation at a busy intersection in Mandaluyong City, two plans are being…

A: To determine the most cost-effective plan using the Present Worth Cost Method, we'll calculate the…

Q: Darnell purchased a new power washer for his detail business but ended up selling it within 7…

A: The type of asset depends on the nature of Darnell's detail business and how he used the power…

Q: Ariana, Incorporated, is considering a project that will result in initial aftertax cash savings of…

A: The cost of capital for a risky project of a company is generally higher than the cost of capital…

Q: The management of Kunkel Company is considering the purchase of a $40,000 machine that would reduce…

A: The tool that is widely used for conducting capital budgeting process where a decision needs to be…

Q: AllCity, Inc., is financed 39% with debt, 8% with preferred stock, and 53% with common stock. Its…

A: WACC means weighted average cost of capital.It is calculated as…

Q: then ABC's stock price per share

A: The constant growth model is a stock valuation method used in finance to determine a stock's…

Q: Year 1 2 3 4 5 6 Stocks -15.69% -26.77 37.43 24.13 - 7.56 6.77 Treasury Bills 7.49% 8.09 6.07 6.07…

A: Standard deviation is a statistical measure of the amount of variability or dispersion in a set of…

Q: (years) Price 1 $97.25 2 $94.53 3 $91.83 4 $89.23 5 $87.53 The above table shows the price per $100…

A: Price = PV = $91.83Years to maturity = N = 3 YearsFace value = FV = $100

Q: could the amortization premium be put in a table form

A: Par value = $125,000Coupon rate = 7.5%Period = 3 yearsYield = 6%Amortization of premium can be put…

Question

Moose Industries has a corporate tax rate of 25%.
Last
year the company realized $14,000,000 in operating income (EBIT). Its annual interest expense is $1,500,000. What was the company's net income for the year?
O a. $9,375,000
O b. $11,625,000
O c. $3,125,000
O d. $12,500,000
O e. $10,500,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Given Value

VIEW

Step 2: Calculation

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Brandt Corporation had sales revenue of 500,000 for the current year. For the year, its cost of goods sold was 240,000, its operating expenses were 50,000, its interest revenue was 2,000, and its interest expense was 12,000. Brandts income tax rate is 30%. Prepare Brandts multiple-step income statement for the current year.
Juroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Refer to the information for Juroe Company on the previous page. Also, assume that Juroes total assets at the beginning of last year equaled 17,350,000 and that the tax rate applicable to Juroe is 40%. Required: Note: Round answers to two decimal places. 1. Calculate the average total assets. 2. Calculate the return on assets.
A company has pre-tax or operating income of $120,000. If the tax rate is 40%, what is the companys after-tax income? A. $300,000 B. $240,000 C. $48,000 D. $72,000
Talbot Enterprises recently reported an EBITDA of $8 million and net income of $2.4 million. It had $2.0 million of interest expense, and its corporate tax rate was 40%. What was its charge for depreciation and amortization?
Moose Industries has a corporate tax rate of 25%. Last year the company realized $14,000,000 in operating income (EBIT). Its annual interest expense is $1,500,000. What was the company's net income for the year? a. $10,500,000 b. $3,125,000 c. $11,625,000 d. $12,500,000 Oe. $9,375,000
Moose Industries has a corporate tax rate of 25%. Last year the c company realized $14,000,000 in operating income (EBIT). Its annual interest expense is $1,500,000. What was the company's net income for the year? O a. $9,375,000 O b. $10,500,000 Oc. $3,125,000 O d. $11,625,000 O e. $12,500,000
Mooseustries has a corporate tax rate of 25%. Last year the company realized $14, 000, 000 in operating income (EBIT). Its annual interest expense is $2, 000, 000. What was the company's net income for the year? Integer, decimal, onE notation allowed.
You have calculated the adjusted profit for the company to be $2,000,000. The tax rate is 25%. Estimated tax paid during the year is $750,000. Employment Tax Credit available (which is non-refundable) is $700,000. The tax refundable for this company is. a.$950,000 b.$200,000 c.$500,000 d.$250,000
Kristyle Company's net income last year was P40,000 and its interest expense was P8,000. Total assets at the beginning of the year were P260,000 and total assets at the end of the year were P315,000. Kristyle Company's income tax rate was 35 percent. Kristyle's return on total assets for the year was closest to * Choices: 7.9%. 16.7%. 14.5%. 15.7%.
Last year, Roswin Robotics have $5,000,000.00 in operating income (EBIT). Its depreciation expense was $1,000,000.00, its interest expense was $1,000,000.00 and its corporate tax rate was 40%. At year-end, it had $14,000,000.00 in current assets, $3,000,000.00 in accounts payable, $1,000,000.00 in accruals, $2,000,000.00 in notes payable and $15,000,000.00 in net PPE. Roswin had no other current liabilities. Assume that Roswin's only non-cash item was depreciation. Compute for the following: 1. Net Income 2. Net Operating Working Capital (NOWC) 3. Net Working Capital (NWC)
G. R. Edwin Inc. had sales of $5.88 million during the past year. The cost of goods sold amounted to $2.8 million. Operating expenses totaled $2.57 million, and interest expense was $30,000. Use the corporate tax rates shown in the popup window, Taxable Income Marginal Tax Rate $0−$50,000 15% $50,001−$75,000 25% $75,001−$100,000 34% $100,001−$335,000 39% $335,001−$10,000,000 34% $10,000,001−$15,000,000 35% $15,000,001−$18,333,333 38% Over $18,333,333 35% , to determine the firm's tax liability. What are the firm's average and marginal tax rates?
In Geri Co, the 5 year weighted average historical pre-tax economic earnings are $1,250,000. The tax rate is 28%. The hurdle and debt rate are 12.25%. The adjusted net assets from prior year-end is $2,050,000. The cap rate applicable to this kind of company is 25% pretax. Determine the value of this business using reasonable rate return on assets. a. $3,995,500 b. $2,050,000 c. $6,045,500 d. Cannot be determined from the information provided.