BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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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?
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$66, 000
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$49, 000
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$44, 000
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$83, 000
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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.