Suppose that Redwood Books has a reported net income of $$15$ million, han operating income $($EBIT$)$ of $$19\mathrm{.}55$ million, and a tax rate of $20\mathrm{.}00\%$

According to the video, which of the following formulas correctly describes the relationship between net income $($NI$),$ EBT, and the tax rate $(t)?$

EBT$=NIt$

EBT$=\frac{NI}{1-t}$

EBT$=NI+(1-t)$

EBT$=NI(1-t)$

Plugging in $$15$ million for $NI$ and $20\mathrm{.}00\%$ in for $t$ into the previous formula yields an EBT of $$18\mathrm{.}75gra{d}_{?}$ million.

According to the video, which of the following most accurately describes the relationship between opertaing income $($EBIT$)$ and EBT? $($Hint: Let

interest expense be noted as I$).$

EBT$=$EBIT$+I$

EBT$=$EBIT$\frac{x}{x}$I

EBT$=$EBIT$-I$

EBT$=\frac{\text{E}\text{B}\text{I}\text{T}}{\text{I}}$

Plugging in the figure you calculated for EBT and $$19,550,000$ in for EBIT into the previous formula, and solving for I yields an interest expense

Redwood Books has an interest expense of $

million.