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

question 60

Multiple Choice

Companies generate income from their "regular" operations and from other sources such as 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 combined federal and provincial income tax rate was 40%.How much was Lindley's operating income,or EBIT?

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

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Variable Length

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Formal Parameter

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