Use the information for the question(s)below.
Rosewood Industries has EBIT of $450 million,interest expense of $175 million,and a corporate tax rate of 21%.
-The total of Rosewood's net income and interest payments is closest to:

Question

Quizplus · Accepted Answer

Net income = EBIT*(1-tax rate) = $450 million * (1-0.21) = $355.50 million.
Total of net income and interest payments = $355.50 million + $175 million = $530.50 million.
The closest option to this figure is option B ($392 million).

Use the Information for the Question(s)below