Question

Suppose Company ABC has revenues of $200 million, cost of goods sold of $350 million, and depreciation of $50 million. What is the company's EBIT? Multiple Choice $200 million $0 $200 million Not determined

Answer 1

Answer:

the EBIT will be of minus 200 millons -$200,000,000

Explanation:

EBIT Will be the Earning before Interest and Taxes

Assuming there is no other operating expense like rent, the EBIT

will be 200 revenues

          -350    cost of goods sold

            -50 depreciation

         -----------------------------

          -200 EBIT

Notice it is negative so it is losses not earnings in this case.