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Funn Rides had sales of $16 million in 2019. Its cost of goods sold was $9.3...

Funn Rides had sales of $16 million in 2019. Its cost of goods sold was $9.3 million, and it had selling, general, and administrative expenses of $3.8 million. The firm paid $90000 in interest expense and $125000 in dividends to its shareholders. For simplicity, assume a flat tax rate of 25%. Funn Rides's net income for 2019 was...

Please show work, I would like to see what I am doing wrong.

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Answer #1

($ in million )

Sales 16

(-) Cost of good sold 9.30

(-) Administration expense 3.8

(-) Interest Expense. 0.09

-------------------

Profit before Tax (A) 2.81

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Tax (25% ) (B) (0.7025)

Net income after tax(A-B) 2.1075

Less: Dividend 0.125

Earning available for shareholders = 2.1075 - 0.125 = $1.9825 million

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