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The following information is given:


Income before interest and tax $20,000

Debt capital $100,000

Interest on debt capital 5%

Tax rate 30%

What is the amount of tax paid for the year?


The amount of tax paid for the year is $ [blank]

Respuesta :

fernandoalonsoc

Answer:

The amount of tax paid for the year is $4,500

Explanation:

Income before interest and tax $20,000

Interest Earn (Paid)                       $5,000

Pre-tax profit                                $15,000

Tax                                                $4,500

Profit                                             $10,500