Given:
Sales = $509,600
Costs = $448,150
Depreciation = $36,100
Interest = $12,400
Tax = 28%
To find:
Net income
Solution:
To find the net income, initially we have to find the EBIT.
[tex]\text{EBIT = Sales - Cost - Depreciation }= \$509,600 - \$448,150 - \$36,100 = \$25350[/tex]
Now, we have to calculate EBT by subtracting the interest paid.
[tex]\text{EBT = EBIT - Interest paid} = \$25350-\$12400= \$12950[/tex]
The net income is derived by deducting the tax from EBT.
[tex]\text{Net income = EBT - Tax}=\$12950-\$3626=\$9324[/tex]
Therefore, the net income is $9324.
