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Fleury Co. has a 34 percent tax rate. Its total interest payment for the year just ended was...

Question:

Fleury Co. has a 34 percent tax rate. Its total interest payment for the year just ended was $37.4 million. What is the interest tax shield?

Income Statement:

The income statement is a company's financial statement that shows the operating performance of the firm which displays the total revenue, expenses, and net earnings of the company over a certain period.

Answer and Explanation:

Formula for calculating the interest tax shield:

{eq}\begin{align*} Interest~tax~shield&=Interest~expense*Tax~rate\\ &=37,400,000*.34\\ &=12,716,000 \end{align*} {/eq}

Fleury Co.'s interest tax shield is $12,715,000


Learn more about this topic:

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Preparing Standard Cost Income Statements

from Accounting 301: Applied Managerial Accounting

Chapter 13 / Lesson 5
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