Q1) Income statement, Little Books Inc. currently reported $3 million of net income. Its EBIT was $6 million, and its tax rate was 40 percent. compute its interest expense? prepare out headings for income statement and then fill in known values. Then divide $3 million of net income by (1-T)=0.6 to determine pre-tax income. Difference between EBIT and taxable income should be interest expense.