Question

Assume a company reported net income of $23,700 during 2018. It also had interest expenses of...

  • Assume a company reported net income of $23,700 during 2018. It also had interest expenses of $6,000 and depreciation and amortization of $9,000. If the income tax rate is 21%, what was its earnings before interest and taxes (EBIT)?
  • a. $30,000
  • b. $34,677
  • c. $36,000
  • d. $45,000
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Homework Answers

Answer #1
EBIT            36,000
Less: Interest               6,000
EBT            30,000
Less: Taxes at 21%               6,300
Net Income            23,700

.

Therefore, the correct option is c.$36,000

Note:

EBIT = Earnings Before Interest and Taxes
EBT = Earnings Before Taxes

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