A company earned a total revenue of N108 million with a total cost of N91 million in 1991. If it paid 45% tax on its gross profit for that year, determine i...

Answer Details

To determine the net profit of the company, we first need to calculate its gross profit. Gross profit is the revenue minus the cost of goods sold, which in this case is N108 million - N91 million = N17 million. Next, we need to calculate the tax the company paid on its gross profit. If the company paid 45% tax on its gross profit, then the tax would be 45% * N17 million = N7.65 million. Finally, to determine the net profit, we subtract the tax from the gross profit: N17 million - N7.65 million = N9.35 million. So the company's net profit was N9.35 million.