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The Memphis Redbirds team has earnings before interest and taxes (EBIT) of $2,250,000 and $450,000 in depreciation expenses. It also has an interest expense of $120,000 and a 40% tax rate.a. How much in taxes will be paid? b. See Additional Classroom Problem 1. What is the team's net income? c. See Additional Classroom Problem 1. If the team had no amortization expenses, what is the team's operating income?

Respuesta :

hyderali230

Answer:

a. How much in taxes will be paid?

$852,000

b. What is the team's net income?

$1,278,000

c. If the team had no amortization expenses , what is the team's operating income?

$2,700,000

Explanation:

Earnings before interest and taxes (EBIT) =           $2,250,000

Less: Interest Expense =                                          $120,000  

Earnings after interest and before taxes (EBIT)     $2,130,000

a. Less: Tax 40% =                                                    $852,000

b. Net Income =                                                        $1,278,000

c.  Operating Income = 2,250,000 + $450,000 = $2,700,000

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