Suppose Ningbo Steel had sales revenue of $11,000 sales revenue, cost of goods sold of $5,000, operating expenses of $3000, 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:. A. $1,600
B. $500
C. $1,000
D. $0

A. $1,600

Explanation:

                               Ningbo Steel

                           Income Statement

Sales Revenue                                   $11,000

Less Cost of goods sold                    $5,000

Gross Profit                                         $6,000

Less Operating Expense                    $3,000

Earning Before Interest and Taxes    $3,000  

Less Interest Expense                         $1,000

Earning before Tax                              $2,000  

Less Tax Expenses (2,000 *20%)       $400

Net Profit after tax                              $1,600

answer; capital structure decision;