DEF Corp. had $31,000,000 in revenues (sales), $10,500,000 inCosts of Goods Sold (COGS), $4,500,000 in...

DEF Corp. had $31,000,000 in revenues (sales), $10,500,000 in Costs of Goods Sold (COGS), $4,500,000 in SG&A expenses, $4,000,000 in depreciation expenses, $3,200,000 in interest expenses, and $1,450,000 in tax expenses. What was the firm’s tax rate?

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Expert Solution

The tax rate is computed as follows:

= Tax expense / (Sales - cost of goods sold - SG&A expenses - depreciation - interest)

= $ 1,450,000 / ($ 31,000,000 - $ 10,500,000 - $ 4,500,000 - $ 4,000,000 - $ 3,200,000)

= $ 1,450,000 / $ 8,800,000

= 16.48% Approximately

jeff jeffy answered 2 years ago

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