Davis Industries recently reported $100,000 of sales, $65,000 of operating costs other than depreciation, and $1,500 of depreciation. The company had no amortization charges, it had $40,000 of bonds that carry a 5% interest rate, and its federal-plus-state income tax rate was 35%. In order to sustain its operations and thus generate sales and cash flows in the future, the firm was required to make $8,000 of capital expenditures on new fixed assets and to invest $1,000 in net operating working capital. What is the firm’s net income?
a. $ 8,222