A Firm Reports a Net Profit Margin of 10% on Sales

question 66

Multiple Choice

A firm reports a net profit margin of 10% on sales of $3 million when ignoring the effects of financing.If taxes are $200,000, how much is EBIT (Operating Income) ? (Use the value in dollars)

• A)$100,000
• B)$300,000
• C)$500,000
• D)$800,000

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Definitions:

Financial Calculator

A specialized calculator used for complex financial calculations, including interest rates, loan payments, and investment values.

Expressed

Clearly stated, demonstrated, or articulated in a particular manner.

Years

Years are units of time used to measure duration, consisting of 12 months or 365 days in a common year and 366 in a leap year.

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A series of equal payments made at equal intervals of time, commonly used in calculations of loan repayments or future savings, where interest compounding occurs at the end of each period.