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Milroy Company Earnings Before Interest, Taxes, Depreciation, Depletion and Amortization

Question 67

Multiple Choice

Milroy Company earnings before interest, taxes, depreciation, depletion and amortization is $2,000,000 in 2018. Milroy's gross receipts have always exceeded $40,000,000. Milroy's interest expense is $800,000. Which of the follow is correct?


A) Milroy can deduct $800,000 of interest expense.
B) Milroy can deduct $600,000 of interest expense and can carry forward the remaining $200,000 indefinitely.
C) Milroy can deduct $600,000 of interest expense and the remaining $200,000 can not be carried forward
D) Milroy can deduct $600,000 of interest expense and can carry back the remaining $200,0003 years..
E) Milroy cannot deduct any interest expense.

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