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must it have borrowed over the same year? 2. A firm has net income of $5,000 and an average tax rate of 40%. Interest expense
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Answer #1
EBIT(balance)(8333.33+650) $8983.33(Approx).
Less:interest expense (650)
EBT(100%)(5000/0.6) 8333.33
Less:tax@40%(8333.33*40%) (3333.33)
Net income(60%) 5000
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