Final answer:
The formula to calculate net income from the options given is Net income = Operating income (1 - Tax rate). This formula allows you to subtract the tax amount, which is operating income multiplied by the tax rate, from the operating income to find the net income.
Step-by-step explanation:
Calculating Net Income
The formula to calculate net income is Net income = Operating income (1 - Tax rate). To demonstrate how this calculation works, consider that if a company has an operating income and is subject to a tax rate, the tax amount it owes can be calculated by multiplying the operating income by the tax rate. The net income is found by subtracting this tax amount from the operating income.
For example, if a company has a national income of $300 and the tax rate is 20% or 0.2, the tax amount would be $300 × 0.2 = $60. The after-tax income (or net income) would be the national income minus the tax amount, which in this case would be $300 - $60 = $240.
Therefore, from the options provided, the correct formula for calculating net income is option c: Net income = Operating income (1 - Tax rate).