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    MonaB's Avatar
    MonaB Posts: 2, Reputation: 1
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    #1

    Oct 22, 2009, 06:14 PM
    NET Income
    What is the net income for a company who plans to sell 1,000 units at a sale price of $45ea. COGS at 40% of the sale price and depreciation of $3000, interest expense of $2500 and other interest of $1,000. The tax rate is 20%.
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Oct 22, 2009, 11:59 PM

    You need to just go through each item in the exact order given and figure out each one. Don't make this more difficult than it is.

    If you sell 1000 units at $45 each, how much revenue are you going to have? Then figure 40% of that to get COGS. The depreciation and interest they are giving you outright. Once you get all those expenses taken care of, how much income before tax do you have? Then figure 20% on it.
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