For the past year, Momsen, Ltd., had sales of $46,382, interest expense of $3,854, cost of goods sold of $16,659, selling and administrative expense of $11,766, and depreciation of $6,415. If the tax rate was 35 percent, what was the company's net income?

Net income= $11,412.2

Explanation:

Giving the following information:

sales of $46,382

interest expense of $3,854

cost of goods sold of $16,659

selling and administrative expense of $11,766

depreciation of $6,415

t=0.35

We need to use the following formula:

Net income= (sales - COGS - selling and administrative expense - interest expense - depreciation) - tax + depreciation

First, we deduct Depreciation to decrease the tax base, but because it is not an actual payment, we have to sum it after tax.

Sales= 46,382

COGS= (16,659)

Gross profit= 29,723

Selling and administrative expense= (11,766)

Interest=(3,854)

Depreciation= (6,415)

EBT= 7,688

Tax= (7,688*0.35)= (2,690.8)

Depreciation= 6,415

Net income= $11,412.2

answer; a large down payment,a longer term loan, would result in a lower monthly payment;

d,