If profit after interest and tax is $500 000, interest is $250 000 and tax is $150 000, earnings before interest and tax (EBIT) is:Group of answer choices$250 000.$600 000.$100 000.$900 000.
Question
If profit after interest and tax is 250 000 and tax is 250 000.100 000.$900 000.
Solution
The Earnings Before Interest and Tax (EBIT) can be calculated by adding the profit after interest and tax, the interest, and the tax.
Here's the step-by-step calculation:
- Profit after interest and tax = $500,000
- Interest = $250,000
- Tax = $150,000
Add these three together:
250,000 (Interest) + 900,000
So, the Earnings Before Interest and Tax (EBIT) is $900,000.
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