BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

FINANCIAL MANAGEMENT

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Firm ABC had operating profits of $100, 000, taxes of $17, 000, interest expense of $34, 000, and preferred dividends of $5, 000. What was the firm’s net profit after taxes?
A
$66, 000
B
$49, 000
C
$44, 000
D
$83, 000
Explanation: 

Detailed explanation-1: -Correct answer: Option b) $49, 000.

Detailed explanation-2: -Operating profit is calculated as: Operating profit = Net profit + Non operating expenses-Non operating incomes.

Detailed explanation-3: -Another way to calculate net operating profit after tax is net income plus net after-tax interest expense (or net income plus net interest expense) multiplied by 1, minus the tax rate.

There is 1 question to complete.