Centennial Brewery produced revenues of $1,145,227 in 2008. It has expenses (excluding depreciation) of $812,640, depreciation of $131,335, and interest expense of $81,112. It pays an average tax rate of 34 percent. What is the firm's net income after taxes? Round your final answer to the nearest dollar.
A) $120,140
B) $248,475
C) $79,292
D) $40,848

Question

Quizplus · Accepted Answer

Net income after taxes is calculated as follows: Revenue - Expenses (excluding depreciation) - Depreciation - Interest Expense = Earnings Before Tax (EBT). EBT * (1 - Tax Rate) = Net Income. Plugging in the numbers: $1,145,227 - $812,640 - $131,335 - $81,112 = $120,140 as EBT. $120,140 * (1 - 0.34) = $79,292. Rounded to the nearest dollar, the net income after taxes is $79,292.

Centennial Brewery Produced Revenues of $1,145,227 in 2008