Question

Simplex Healthcare had net income of $5,411,623 after paying taxes at 34 percent. The firm had revenues of $20,433,770.Its interest expense for the year was $1,122,376, while depreciation expense was $2,079,112. What was the firm's operating expenses excluding depreciation

Answer 1

The correct answer is $9,032,853.

Step-by-step explanation:

According to the scenario, the given data are as follows:

Net income = $5,411,623

Taxes = 34%

Total revenue = $20,433,770

Interest expense = $1,122,376

Depreciation expense = $2,079,112

So, we can calculate the firm's operating expenses by using following formula:

We first calculate EBT for the firm So,

EBT = Net income ÷ 1 - Taxes

= $5,411,623 ÷ 1 - 34%

= $8,199,429

So, total EBITDA = EBT + Interest expense + Depreciation Expense

= $8,199,429 + $1,122,376 + $2,079,112

= $11,400,917

So, we can calculate operating expense as:

= Total revenue - EBITDA

= $20,433,770 - $11,400,917

= $9,032,853.

Hence, the firm's operating expenses was $9,032,853.