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Meric Mining Inc
Meric Mining Inc. recently reported $22,750 of sales, $7,500 of operating costs other than depreciation, and $1,200 of depreciation. The company had no amortization charges, it had outstanding $6,500 of bonds that carry a 6.25% interest rate, and its federal-plus-state income tax rate was 25%. How much was the firm's net income after taxes? Meric uses the same depreciation expense for tax and stockholder reporting purposes.
.Select the correct answer. a. $10,232.81 0 b. $10,227.21 c. $10,210.41 d. $10,216.01 0 e. $10,221.61
Expert Solution
Sales = 22750
operating cost total = 7500+ 1200
=8700
Interest given = 6500*6.25%
=406.25
Net income with tax= 22750-8700-406.25
= 13643.75
Net income after tax = 13643.75* (1- 25%)
= $10,232.81
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