Edge Brothers Recently Reported Net Income of $385,000

question 67

Multiple Choice

Edge Brothers recently reported net income of $385,000. The tax rate is 40 percent. The company's interest expense was $200,000. What would have been the company's net income if they would have been able to double their operating income (EBIT) , assuming that the company's tax rate and interest expense remain unchanged?

• A) $ 770,000
• B) $ 890,000
• C) $ 920,000
• D) $1,100,000
• E) $1,275,000

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Definitions:

Somatic Cells

All the cells in the body except for the germ cells (the ova and sperm).

Genes

The basic physical and functional units of heredity made up of DNA.

Zygotes

The initial cell formed when a new organism is produced by means of sexual reproduction, resulting from the union of an ovum and a sperm cell.

Somatic Cells

Any cell in the body that is not a germ cell (sperm or egg), making up the major part of tissues and organs.