Net income

5. Grunewald Industries recently reported $510,000 of sales, $357,000 of operating costs other than depreciation, and $20,000 of depreciation. The company had no amortization charges, it had $100,000 of bonds that carry an 8% interest rate, and its federal-plus-state income tax rate was 40%. In order to sustain its operations and thus generate sales and cash flows in the future, the firm was required to make $100,000 of capital expenditures on new fixed assets and to invest $2,000 in net operating working capital. What is the firm's net income?

a. $ 75,000

b. $ 88,250

c. $100,000

d. $110,500

e. $125,000