Suppose that Redwood Books has a reported net income of $10 million, an operating income (EBIT) of $13.4 million, and a tax rate of 20.00% According to the video, which of the following formulas correctly describes the relationship between net income (NI), EBT, and the tax rate (t)? EBT = NI EBT = NI t EBT = NI x (1 t) EBT = NI + (1 -t) Plugging in $10 million for NI and 20.00% in for t into the previous formula yields an EBT of $ EBT = 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). EBIT EBT EBIT X I EBT = EBIT - I EBT EBIT + I million. Plugging in the figure you calculated for EBT and $13,400,000 in for EBIT into the previous formula, and solving for I yields an interest expense of $ million. Step 3: Practice: Income Statements

Suppose that Redwood Books has a reported net income of $10 million, an operating income (EBIT) of $13.4miltion, and a tax rate of 20.00% According to the video, which of the following formulas correctly describes the relationship between net income (NI), EBT, and the tax rate ( t )? EBT=1tNIEBT=NItEBT=NI(1t)EBT=NI+(1t) Plugging in $10 million for NI and 20.00% in for t into the previous formula yields an EBT of $ milition. According to the video, which of the following most accurately describes the relatigaship between opertaing income (EBrT) and EBT? (Hint: Let interest expense be noted as I). EBT=1EAITEBT=EBITIEBT=EBIT1EBT=EBIT+I Plugging in the figure you calculated for EBT and $13,400,000 in for EBIT into the previous formula, and solving for 1 yields an interest expense of $ million