Problem:
Meric Mining Inc. recently reported $15,000 of sales, $7,500 of operating costs other than depreciation, and $1,200 of depreciation. The company had no amortization charges, it had outstanding $6,500 of bonds that carry a 6.25% interest rate, and its federal-plus-state income tax rate was 35%.
Required:
Question 1: How much was the firm's net income after taxes? Meric uses the same depreciation expense for tax and stockholder reporting purposes.
Explain in detail and also show all work.