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A company earned a total revenue of =₦=108 million with a total cost of =₦=91 mi...


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Question

A company earned a total revenue of =₦=108 million with a total cost of =₦=91 million in 1991. If it paid 4596 tax on its gross profit for that year, determine its net profit.

Options

A)
=₦= 24.65 million
B)
=₦= 17.00 million
C)
=₦= 9.35 million
D)
=₦= 7.65 million

The correct answer is C.

Explanation:

The question is asking us to determine the net profit of a company in 1991 given its total revenue, total cost, and tax paid. The company earned a total revenue of =₦=108 million and had a total cost of =₦=91 million. To calculate the gross profit, we need to subtract the total cost from the total revenue:

Gross Profit = Total Revenue - Total Cost = =₦=108 million - =₦=91 million = =₦=17 million

We are also told that the company paid a tax of =₦=4596 on its gross profit. To calculate the net profit, we need to subtract the tax paid from the gross profit:

Net Profit = Gross Profit - Tax Paid = =₦=17 million - =₦=4596 = =₦=9.35 million

Therefore, the correct answer is Option C: =₦=9.35 million. It is important to note that net profit is the amount of money a company makes after deducting all costs and expenses, including taxes, from its total revenue. To learn more about this, please read the relevant sections of the recommended textbooks.

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Discussion (2)

  • Oluwaseun Hassan

    How did you get 9.35? Net profit is supposed to be profit after tax. That's Gross profit less tax. What's the tax please?

  • pls explan to me