Bed bug inn has annual sales of $137,000. earnings before interest and taxes is equal to 5.8 percent of sales. for the period, the firm paid $4,700 in interest. what is the profit margin if the tax rate is 34 percent? -2.43 percent1.56 percent3.33 percent-5.29 percent-6.11 percent

Option (B) is correct.

Explanation:

EBIT = 5.8 percent of sales

       = 0.058 × $137,000

       = $7,946

Earning before tax (EBT) = EBIT - Interest

                                         = $7,946 - $4,700

                                         = $3,246

Earning after tax or net income = Earning before tax - Tax @34%

                                                    = $3,246 - $1,103.64

                                                    = $2,142.36

Profit margin ratio = Net income ÷ Net sales

                              = $2,142.36 ÷ $137,000

                              = 0.0156 or 1.56%

forbearance of student loan payments. under forbearance, your loan payments are postponed (or reduced) but interest continues to accrue during the period of forbearance. if you don't pay the interest during that period, the interest may be “capitalized,” which means it is added to your principal balance.

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