A Canadian software company reported CAD 10 million in revenue, cost of goods sold of CAD 3 million, operating expenses of CAD 4 million, interest expense of CAD 500,000, and an income tax rate of 25%. What is the company's net income for the period?

Question: A Canadian software company reported CAD 10 million in revenue, cost of goods sold of CAD 3 million, operating expenses of CAD 4 million, interest expense of CAD 500,000, and an income tax rate of 25%. What is the company's net income for the period?

Answer options:

• CAD 1,875,000 ✅ CAD 2,250,000
• CAD 2,625,000
• CAD 3,375,000

Correct answer: CAD 2,250,000

Explanation: Net income = (Revenue - COGS - Operating Expenses - Interest Expense) * (1 - Tax Rate). So, (10M - 3M - 4M - 0.5M) * (1 - 0.25) = (2.5M) * 0.75 = CAD 1,875,000.