Companies generate income from their "regular" operations and from other sources like interest earned on thesecurities they hold, which is called non-operating income. Lindley Textiles recently reported $25,000 of sales,$7,250 of operating costs other than depreciation, and $1,000 of depreciation. Theamortization charges and no non-operating income. It had $8,000 of bonds outstanding that carry a 7.5%companyhad nointerest rate, and its federal-plus-state income tax rate was 25%. How much was Lindley's operating income, orEBIT?Select the correct answer.O a. $16,750O b. $12,333O c. $15,278d. $18,223e. $13,805

EBIT refers to Earnings Before Interest and Taxes. Operating income or EBIT is the income generated…

Companies generate income from their "regular" operations and from other sources like interest earned on the securities they hold, which is called non-operating income. Lindley Textiles recently reported $25,000 of sales, $7,250 of operating costs other than depreciation, and $1,000 of depreciation. The company had no amortization charges and no non-operating income. It had $8,000 of bonds outstanding that carry a 7.5% interest rate, and its federal-plus-state income tax rate was 25%. How much was Lindley's operating income, or EBIT? Select the correct answer. O a. $16,750 b. $12,333 c. $15,278 d. $18,223 e. $13,805

Companies generate income from their "regular" operations and from other sources like interest earned on the securities they hold, which is called non-operating income. Lindley Textiles recently reported $25,000 of sales, $7,250 of operating costs other than depreciation, and $1,000 of depreciation. The company had no amortization charges and no non-operating income. It had $8,000 of bonds outstanding that carry a 7.5% interest rate, and its federal-plus-state income tax rate was 25%. How much was Lindley's operating income, or EBIT? Select the correct answer. O a. $16,750 b. $12,333 c. $15,278 d. $18,223 e. $13,805

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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