Pepsico Inc. reported the following income statement for 1999 (in millions of dollars):

Net Sales 20,367

Operating expenses (17,484)

Restructuring charge (65)

Operating profit 2,818

Gain on asset sales 1,083

Interest expense (363)

Interest income 118

3,656

Provision for income taxes 1,606

Net income 2,050

a. Calculate core operating income after tax. The firms marginal tax rate is 37%.

b. Calculate the effective tax rate on core operating income.

Pepsico Inc. reported the following income statement for 1999 (in millions of dollars): Net Sales 20,367 Operating expenses (17,484) Restructuring charge (65) Operating profit 2,818 Gain on asset sales 1,083 Interest expense (363) Interest income 118 3,656 Provision for income taxes 1,606 Net income 2,050 a. Calculate core operating income after tax. The firm's marginal tax rate is 37%. b. Calculate the effective tax rate on core operating income