A firm incurs $60,000 in interest expenses each year. If the tax rate of the firm is 30%, what is the effective after-tax interest rate expense for the firm? A. $29,400 B. $33,600 C. $42,000 D. $48,300

A firm incurs $60,000 in interest expenses each year. If the tax rate of the firm is 30%, what is the effective after-tax interest rate expense for the firm? A. $29,400 B. $33,600 C. $42,000 D. $48,300

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 2MC

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Question

What is the effective after- tax interest rate expense for the firm on these financial accounting question?

A firm incurs $60,000 in interest expenses each year. If the
tax rate of the firm is 30%, what is the effective after-tax
interest rate expense for the firm?
A. $29,400
B. $33,600
C. $42,000
D. $48,300

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