Question
Net Income may also be called earnings or profit by different groups. It is the accounting measure of income minus expenses. Since there may be
Net Income may also be called earnings or profit by different groups. It is the accounting measure of income minus expenses. Since there may be several non-cash expenses, it is not a measure of cash flow.\ \ Meric Mining Inc. recently reported $15,000 of sales, $7,500 of operating costs other than depreciation, and $1,200 of depreciation. The company had no amortization charges, it had outstanding $6,500 of bonds that carry a 6.25% interest rate, and its federal-plus-state income tax rate was 25%. How much was the firm's net income after taxes? Meric uses the same depreciation expense for tax and stockholder reporting purposes.\ \ The interest expense is not given directly. You calculate the annual expense by multiplying the amount of outstanding bonds * the interest rate.\
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