During 2010, Raines Umbrella Corp. had sales of $730,000. Cost of goods sold, ad

Question

During 2010, Raines Umbrella Corp. had sales of $730,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $450,000, $90,000, and $160,000, respectively. In addition, the company had an interest expense of $92,000 and a tax rate of 35 percent. (Ignore any tax loss carryback or carryforward provisions.)

During 2010, Raines Umbrella Corp. had sales of $730,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $450,000, $90,000, and $160,000, respectively. In addition, the company had an interest expense of $92,000 and a tax rate of 35 percent. (Ignore any tax loss carryback or carryforward provisions.)

Explanation / Answer

Particulars Amount ($) Sales 730000 COGS -450000 Gross Profit 280000 Admin & Selling -90000 EBITDA 190000 Depreciation -160000 EBIT 30000 Int Exp -92000 Loss before tax 62000 Tax ( no tax as it

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