Question

Suppose Ningbo Steel had sales revenue of $11,000 sales revenue, cost of goods sold of $5,000, operating expenses of $3,000, interest expense of $1,000, a tax rate of 20%, and 1,000 shares of common stock outstanding. Based on this information, net profit after tax was:

Answer 1

Net profit after tax = $1600

Step-by-step explanation:

Below is the calculation for net profit after tax:

Net profit = Sales revenue - cost of good sold - operating expenses - interest expenses

Net profit = 11000 - 5000 - 3000 -1000

Net profit = 2000

Net profit after tax = 2000 - (20 % of 2000)

Net profit after tax = 2000 - 400

Net profit after tax = $1600