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Rao Construction recently reported $30.00 million of sales, $12.60 million of operating costs other than depreciation, and $3.00 million of depreciation. It had $8.50 million of bonds outstanding that carry a 7.0% interest rate, and its federal-plus-state income tax rate was 25%. What was Rao's operating income, or EBIT, in millions.

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ayokenny2001

Answer:

$14.4 million.

Explanation:

Since sales = $30.00 million

Operating costs excluding depreciation = $12.6 million

Depreciation = $3.0 million

Therefore; Operating income (EBIT) = Net earnings - Operating costs - Depreciation

= $30.00 - $12.6 - $3.0

= $14.4 million.

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