Question

Mandalay Resorts had revenue of $2,462, income from continuing operation of $53, provision for income tax of $40, interest expense of $230, & depreciation & amortization of $216 (all in millions). Mandalay had EBIT (in millions) of: a. $539 b. $323 c. -$217 d. $1,923

Answer 1

Answer:

The correct answer is D

Explanation:

The formula to compute the EBIT (Earnings before Interest and Tax) is as:

EBIT (Earnings before Interest and Tax) = Revenue - Provision for income tax - amortization and depreciation - Interest expense - income from continuing operation

where

Revenue is $2,462

Depreciation and amortization is $216

Provision for income tax is $40

Income from continuing operation is $53

Interest expense is $230

Putting the values above:

EBIT = $2,462 - $216 - $230 - $53 - $40

EBIT = $1,923