1. An engineering business is expected to have revenues of $1 million each year. The costs of producing the manufactured items, consisting of labour and raw materials, amounts to $600,000. The overheads are $50,000, the interest on debt is $50,000 and the tax rate is 35%. i) (ii) (iii) (iv) What is the gross profit? What is the EBIT (PBIT)? How much tax is paid? What is the net income (profit)? 2 Over a period of a year, a business engages in the following transactions: (i)Borrows $600,000 from the bank (ii) Purchases a lathe for $50,000 (iii) Purchases a delivery vehicle for $15,000 (iv) Purchases stock for $200,000 (v) Sells $100,000 of product, which has not been paid for by the end of the year 1. An engineering business is expected to have revenues of $1 million each year. The costs of producing the manufactured items, consisting of labour and raw materials, amounts to $600,000. The overheads are $50,000, the interest on debt is $50,000 and the tax rate is 35%. i) (ii) (iii) (iv) What is the gross profit? What is the EBIT (PBIT)? How much tax is paid? What is the net income (profit)? 2 Over a period of a year, a business engages in the following transactions: (i)Borrows $600,000 from the bank (ii) Purchases a lathe for $50,000 (iii) Purchases a delivery vehicle for $15,000 (iv) Purchases stock for $200,000 (v) Sells $100,000 of product, which has not been paid for by the end of the year