A Division's Interest Expense
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G+ Company is a division of GHI Company. This data pertains to G+ division. Sales amounted to $800,000. Cost of sales is 60% of sales. Other direct expenses of the division amount to 15% of sales. Allocated expenses are $90,000. Interest amounts to 10% of long-term debt. Taxes are 30% of income. Total assets are $500,000 with 10% representing short-term and 40% representing long-term debt.
How much is the division's interest expense?
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Solution Summary
Given a company's sales, direct expenses, interest amounts, taxes and total assets, the solution finds the interest expense in two lines of calculations.
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