### Problem Statement:For the past year, Momsen Limited had sales of $45,017, interest expense of $3,308, cost of goods sold of $15,434, selling and administrative expense of $11,101, and depreciation of $5,400. If the tax rate was 21 percent, what was the company's net income?### Multiple Choice:- ( ) $6,842- ( ) $4,541- ( ) $9,774- ( ) $7,721---### Explanation:To calculate the net income of Momsen Limited, follow the steps below:1. **Calculate the Earnings Before Interest and Taxes (EBIT):** \[ \text{EBIT} = \text{Sales} - \text{Cost of Goods Sold} - \text{Selling and Administrative Expenses} - \text{Depreciation} \] Substituting the given values: \[ \text{EBIT} = 45,017 - 15,434 - 11,101 - 5,400 = 13,082 \]2. **Calculate the Earnings Before Tax (EBT):** \[ \text{EBT} = \text{EBIT} - \text{Interest Expense} \] Substituting the given values: \[ \text{EBT} = 13,082 - 3,308 = 9,774 \]3. **Calculate the Tax Expense:** \[ \text{Tax Expense} = \text{EBT} \times \text{Tax Rate} \] Substituting the given values: \[ \text{Tax Expense} = 9,774 \times 21\% = 2,052.54 \]4. **Calculate the Net Income:** \[ \text{Net Income} = \text{EBT} - \text{Tax Expense} \] Substituting the given values: \[ \text{Net Income} = 9,774 - 2,052.54 = 7,721.46 \]### Conclusion:The company's net income is approximately $7,721. Therefore, the correct option is:- ( ) $6,842- ( ) $4,

Net income is overall profit received by the company after providing the operating expenses and the…

For the past year, Momsen Limited had sales of $45,017, interest expense of $3,308, cost of goods sold of $15,434, selling and administrative expense of $11,101, and depreciation of $5,400. If the tax rate was 21 percent, what was the company's net income? Multiple Choice $6,842 $4,541 $9,774 $7,721

For the past year, Momsen Limited had sales of $45,017, interest expense of $3,308, cost of goods sold of $15,434, selling and administrative expense of $11,101, and depreciation of $5,400. If the tax rate was 21 percent, what was the company's net income? Multiple Choice $6,842 $4,541 $9,774 $7,721

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

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