Meric Mining Inc. recently reported $17,500 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 25%. How much was the firm's net income after taxes

$6,295.31  

Explanation:

Net income=earnings before tax *(1-tax rate)

earnings before tax=sales-operating costs- depreciation-interest expense

sales=$17,500

operating costs=$7,500

depreciation=$1,200

interest expense=bonds value*interest rate=$6,500*6.25%=$406.25

earnings before tax=$17,500-$7,500-$1,200-$406.25=$8,393.75  

tax rate=25%

net income after taxes=$8,393.75*(1-25%)

net income after taxes=$6,295.31  

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

answer; /// that is so (false);