Little bugs incorporation recently reported 3 million of net income as earnings before interest text was six million and is tax rate was 40% each what was its interest expense
Little bugs incorporation recently reported 3 million of net income as earnings before interest text was six million and is tax rate was 40% each what was its interest expense
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter2: Financial Statements, Cash Flow,and Taxes
Section: Chapter Questions
Problem 7P
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Question
Little bugs incorporation recently reported 3 million of net income as earnings before interest text was six million and is tax rate was 40% each what was its interest expense
Expert Solution
Step 1
Net Income = $3,000,000
Earnings before Interest and Tax = $6,000,000
Tax Rate = 40% or 0.40
Calculation of Interest Expense is as follows:
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