Business Finance Question?

A firm has Owner's Equity of $2,000,000; debt of $500,000 that must pay interest of
10%; and total inventories of $250,000. It also has sales of $5,000,000 and an EBIT of
$500,000. If it pays taxes of 40%, what is its NIAT?

please help. :( It's stressing Me out

Here...

$500,000 (which is EBIT) - $50,000 (which is interest expense or 10% or $500K) = $450,000 (this is net income before tax).

Now...
$450,000 - $180,000 (which is 40% of net income before tax or $450K X 40%) = $270,000 (NIAT)

Your answer is $270,000.

Man, don't do the guys homework for him! If he can't handle simple questions like this, he needs to find another major or go to work at McDonalds

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　　Capital Investment 　　Business Investment 　　Business financing 　　Business Invest 　　Business Debt 　　Bond Investment 　　Angel Funds 　　Alternative Investment

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