What is the true answer? general Accounting XYZ Electronics has $350,000 in assets and earnings before interest andtaxes (EBIT) of $75,000 for the fiscal year. The company has a marginaltax rate of 35% and pays interest of 10% on all debt. If the companymaintains a 45% debt/assets ratio, what is its net income after taxes andinterest?

Step 1: Define Net Income After Taxes and InterestNet income is the company's profit after deducting…

Answered: XYZ Electronics has $350,000 in assets…

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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XYZ Electronics has $350,000 in assets and earnings before interest and taxes (EBIT) of $75,000 for the fiscal year. The company has a marginal tax rate of 35% and pays interest of 10% on all debt. If the company maintains a 45% debt/assets ratio, what is its net income after taxes and interest?