Molteni Motors Inc. recently reported $6 million of net income. Its EBIT was $13 million, and its tax rate was 40%. What was its interest expense?
Earnings Before Interest and Tax:
Earnings before interest and tax are the earnings that take into consideration all the operating and non operating expenses except interest and income tax expenses. EBIT = Revenues - expenses including depreciation and amortization. Operating profit and EBIT are the same.
Answer and Explanation:
Interest expense is $3,000,000
Since we know the net income and EBIT, to find out interest we have to do reverse calculations starting from net...
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fromChapter 5 / Lesson 18
This lesson will provide the formula for how to calculate interest expense. This lesson will also explain the phrase and provide a sample calculation.