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The following information Is given

Income before interest and tax
$20,000
Debt capital
$100,000
Interest on debt capital
5%
Tax rate
30%

What is the amount of tax paid for the year?

The amount of tax paid for the year is $___

Respuesta :

fivestarent9

Answer:

The tax paid for the year is $4,500

Explanation:

income before interest and tax = $20,000

less interest on debt:

    5% of $100,000                   =   - $5,000

earnings after interest              =    $15,000

The amount of tax paid is 30% of $15,000 = $4,500

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