Answer :
Answer:
$0.8million
Explanation:
Net income of any corporation can be calculated as follows:
Net income=EBIT-interest expense-tax expense
Net income=$13 million
Interest expense=?
tax expense=(EBIT- interest expense)*35%=($20.8million- interest expense)*35%
13=20.8-interest expense-($20.8million- interest expense)*35%
13=20.8-interest expense-(7.28-0.35*interest expense)
13=20.8-interest expense-7.28+0.35*interest expense
13=13.52-0.65*interest expense
13-13.52=-0.65*interest expense
-0.52=-0.65*interest expense
interest expense=-0.52/-0.65=$0.8million