Net Income for an organization is the Profit After tax and dividend paid. The formula for Net Income is:
Net Income = Sales - Cost of goods Sold - Operating Expenses - Return and Allowances - Taxes - Cash dividends
From the data given,
Sales = $12 Million
Cost of Goods Sold = $3 Million
Operating Expenses = $3 Million
Interest Expenses = $0.5 Million
Returns and Allowances = $1 Million
Taxes = $0.1 Million
Cash Dividend = $0.4 Million
By putting the variables in the above formula,
Net Income = $12 Million - $3 Million - $1 Million - $3 Million - $0.5 Million - $0.1 Million - $0.4 Million
Net Income = $4 Million
Therefore, the answer is B Net Income is $ 4 Million
