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In: Finance
Explain & Show Work: Georgia Office Supplies recently reported $12,500 of sales, $7,250 of operating costs...
Explain & Show Work:
Georgia Office Supplies recently reported $12,500 of sales, $7,250 of operating costs other than depreciation, and $1,250 of depreciation. The company had no amortization charges and no non-operating income. It had $8,000 of bonds outstanding that carry a 7.5% interest rate, and its federal-plus-state income tax rate was 40%. The firm had 1000 shares outstanding
a) How much was the firm's taxable income, or earnings before taxes (EBT)?
b) What is the firm’s EPS assuming a Dividend of $ 100
Solutions
jeff jeffy answered 3 months agoRelated Solutions
Georgia Office Supplies recently reported $12,500 of sales, $7,250 of operating costs other than depreciation, and...
Georgia Office Supplies recently reported $12,500 of sales,
$7,250 of operating costs other than depreciation, and $1,250 of
depreciation. The company had no amortization charges and no
non-operating income. It had $8,000 of bonds outstanding that carry
a 7.5% interest rate, and its federal-plus-state income tax rate
was 40%. The firm had 1,000 shares outstanding.
1) How much was the firm's taxable income, or earnings
before taxes (EBT)?
EBT = $12,500 - $7,250 - $1,250 -
(.075 x $8,000) =...
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