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There are some missing numbers, indicated by capital letters, in the following reformulated income statement. Amounts are in millions of dollars. The firm's marginal tax
There are some missing numbers, indicated by capital letters, in the following reformulated income statement. Amounts are in millions of dollars. The firm's marginal tax rate is 40 percent. Operating revenues 5,500 Cost of sales 3,000 Other operating expenses 1,500 Operating income before tax A Tax as reported B Tax benefit of interest expense Operating income after tax D Interest expense before tax E Tax benefit of interest expense (E) Interest expense after tax 60 Comprehensive income 500 1. Identify the missing numbers. (6 marks) 2. Calculate the firm's effective tax rate on operating income.(4 marks)
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