calculate the Net Income based upon the following: Sales $100,000 Gross Profit Margin 35% of Sales...
calculate the Net Income based upon the following:
|
Sales |
$100,000 |
|
Gross Profit Margin |
35% of Sales |
|
Operating Profit Margin (EBIT) |
20% of Sales |
|
Interest Expense |
$5,000 |
|
Tax Rate |
35% |
|
A. $6,500 |
||
|
B. $6,000 |
||
|
C. $15,000 |
Homework Answers
Correct answer------------$9,750
None of the options provided are correct. Please leave comment in below for any query.
Working
| Operating Profit Margin (EBIT) (100000 x 20%) | $ 20,000.00 |
| Interest expense | $ 5,000.00 |
| Income before taxes | $ 15,000.00 |
| Income tax expense (15000 x 35%) | $ 5,250.00 |
| Net Income | $ 9,750.00 |
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