Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Companies generate income from their regular operations and from other sources like interest earned on the securities they hold, which is called non - operating

Companies generate income from their "regular" operations and from other sources like interest earned on the securities they hold, which is called non-operating income. Lindley Textiles recently reported $90,000 of sales, $7,250 of operating costs other than depreciation, and $1,000 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 25%. How much was Lindley's operating income, or EBIT?
Select the correct answer.
a. $84,989
b. $80,671
c. $82,830
d. $83,909
e. $81,750

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Secured Finance Transactions Key Assets And Emergin Markets

Authors: Paul U Ali

1st Edition

1905783108, 978-1905783106

More Books

Students also viewed these Finance questions

Question

=+6. How satisfied are you with this attitude?

Answered: 1 week ago

Question

1. Explain the 2nd world war. 2. Who is the father of history?

Answered: 1 week ago