A firm reports a net profit margin of 10% on sales of $3 million when ignoring the effects of financing. If taxes are $200,000, how much is EBIT?
A) $100,000
B) $300,000
C) $500,000
D)$800,000

Name: A firm reports a net profit margin of 10% on sales of $3 million when ignoring the effects of financing. If taxes are $200,000, how much is EBIT? A) $100,000 B) $300,000 C) $500,000 D)$800,000
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Question

Quizplus · Accepted Answer

Net profit margin = (EBIT - Taxes)/Sales.10 = (EBIT - 200,000)/$3,000,000EBIT = $500,000

A Firm Reports a Net Profit Margin of 10% on Sales