Lone Star Plastics has the following data: Total Assets: R100,000 ; Net Profit margin: 6.0%; Tax rate: 40% ; Debt ratio: 40.0% of which 30% is interest bearing debt; Interest rate: 8.0% : Total assets turnover: 3.0. Calculate Lone Star's EBIT (Earnings before Interest and Tax).

Lone Star Plastics has the following data: Total Assets: R100,000 ; Net Profit margin: 6.0%; Tax rate: 40% ; Debt ratio: 40.0% of which 30% is interest bearing debt; Interest rate: 8.0% : Total assets turnover: 3.0. Calculate Lone Star's EBIT (Earnings before Interest and Tax).

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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Question

Lone Star Plastics has the following data:
Total Assets: R100,000 ; Net Profit margin: 6.0%;
Tax rate: 40% ; Debt ratio: 40.0% of which 30% is interest bearing debt;
Interest rate: 8.0% : Total assets turnover: 3.0.
Calculate Lone Star's EBIT (Earnings before Interest and Tax).

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