Ask Experts Questions for FREE Help !
Ask
    Haley1976's Avatar
    Haley1976 Posts: 4, Reputation: 1
    New Member
    		  
    #1

    Mar 17, 2007, 06:45 PM
    Net Income?
    I am trying to find the net income for the following:
    Operating Income=5 million
    net depreciation expense=1 million
    Interest expense=1 million
    tax rate=40%
    current assets=14 million
    non interest liabilities=4 million
    net plant & equipment=15 million
    after tax cost of capital=10%

    Thank you for you help..
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
    Ultra Member
    		  
    #2

    Mar 17, 2007, 07:19 PM
    What do YOU think the answer is?
    Haley1976's Avatar
    Haley1976 Posts: 4, Reputation: 1
    New Member
    		  
    #3

    Mar 17, 2007, 07:40 PM
    I believe I have figured it out..

    my answer is:
    5
    +14
    +15
    =34 million in assets

    1
    +1
    +4
    =6 million in liability

    34
    - 6
    =28 million
    x.4 (40% tax)
    =11.2 million net income
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
    Ultra Member
    		  
    #4

    Mar 17, 2007, 09:28 PM
    Net Income deals with Revenues and Expenses.

    The following accounts relate to assets and liabilities that you see on the balance sheet:
    current assets=14 million
    net plant & equipment=15 million
    non interest liabilities=4 million

    The following accounts deal with Net Income and the Income Statement:

    Operating Income=5 million
    LESS:
    net depreciation expense=1 million
    Interest expense=1 million

    Income BEFORE Tax = 3 million

    TAX = 3 million x 40% = 1.2 million

    NET INCOME 1.8 million
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Net income [ 1 Answers ]

Question Accounts officers at xerox corporation discovered that significant errors have been made in the valuation of inventory and are worried that it might have significant impact on the net income and earnings per share. What are possible top 3 effects of the errors on the net income? What...

Net income [ 1 Answers ]

The changes to the account balances of Fritzs furniture Co Are as follows Cash 79,000 Acct Rec 45,000 Inventory 127,000 Investments (47,000)

Calculating net income [ 3 Answers ]

Vision Corporation's financial statements for the current year include the following: Income from continuing operations $744,000 Prior period adjustment (increase in prior year net income, net of taxes 228,000 Cash dividends paid to preferred stockholders 242,400 Gain from...

View more questions Search