Office Supplies Inc. recently reported $25,000 of sales, $12,500 of operating costs other than depreciation, and $1,500 of depreciation. It had $10,000 of bonds outstanding that carry a 4% interest rate, and its federal-plus-state income tax rate was 40%. How much was the firm's earnings before taxes (EBT)?

a. $5,981

b. $7,398

c. $10,600

d.$8,870