Net Profit after tax Rs. 60,000; 10% Long-term debt Rs.10,00,000; and Tax rate 40%. The net profit before interest and tax is:
- ARs. 1,50,000
- BRs. 2,50,000.
- CRs.200,000.
- DRs.100,000
Solution & Step-by-step Explanation
Let's calculate backwards from Net Profit After Tax (PAT) to Net Profit Before Interest and Tax (EBIT):Find Net Profit Before Tax (PBT):
Find Interest Expense:
Find EBIT (Net Profit Before Interest and Tax):
Find Interest Expense:
Find EBIT (Net Profit Before Interest and Tax):