Compute interest expenses from given data

Reference no: EM1319691

Income statement, Little Books Inc. recently reported $3 million of net income. Its EBIT was $6 million, and its tax rate was 40 percent. What was its interest expense? Hint: Write out the headings for an income statement and then fill in the known values. Then divide $3 million of net income by (1-T)=0.6 to find the pre-tax income. The difference between EBIT and taxable income must be the interest expense.

Reference no: EM1319691

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