Companies Generate Income from Their "Regular" Operations and from Other

question 62

Multiple Choice

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 $12,500 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 40%.How much was Lindley's operating income,or EBIT?

• A) $3,462
• B) $3,644
• C) $3,836
• D) $4,038
• E) $4,250

---

Definitions:

Specific Phobia

A type of anxiety disorder characterized by an excessive and irrational fear of a specific object, situation, or activity.

Embarrassment

A feeling of self-consciousness, shame, or awkwardness that occurs when a person's dignity is wounded.

Generalized Anxiety Disorder

A mental health disorder characterized by persistent and excessive worry about multiple different things.

Panic Disorder

A mental health condition characterized by recurring panic attacks, often for no apparent reason, and the persistent fear of experiencing future attacks.