Genetech Has $4,000,000 in Assets

question 38

Multiple Choice

Genetech has $4,000,000 in assets. It has decided to finance 30% with long-term financing (9% rate) and 70% with short-term financing (7%) rate. Assuming a 40% tax rate, what will its annual after-tax interest costs be?

• A) $78,000
• B) $126,000
• C) $182,400
• D) $304,000

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Definitions:

Capacity Analysis

is the assessment of a company's ability to produce goods or services at an optimal cost and efficiency, considering its resources.

Customer Support Department

A division within a company dedicated to assisting customers with their questions, issues, and needs concerning products or services.

Time-Driven Activity-Based Costing

An accounting method that assigns costs to products based on the estimated amount of time activities take and the cost of performing those activities.

Customer Cost Analysis

The process of examining and evaluating the costs associated with acquiring and supporting customers to determine profitability.