Question

Tater and Pepper Corp. reported free cash flows for 2018 of $58.1 million and investment in operating capital of $41.1 million. Tater and Pepper incurred $15.5 million in depreciation expense and paid $20.9 million in taxes on EBIT in 2018. Calculate Tater and Pepper’s 2018 EBIT. (Enter your answer in millions of dollars rounded to 1 decimal place.

Answer 1

Answer:

104.6 million

Explanation:

Data provided in the question:

Free cash flows for 2018 = $58.1 million

Investment in operating capital = $41.1 million

Depreciation expense = $15.5

Taxes on EBIT in 2018 = $20.9 million

Now,

EBIT

= Free Cash Flow + Investment in operating capital + Taxes - Depreciation

on substituting the respective values, we get

EBIT = $58.1 million + $41.1 million + $20.9 million - $15.5

or

EBIT = 104.6 million