Consider the following income statement: Sales $602,184 Costs $391,776 Depreciation $89,100 Taxes 32% Required: 1. Calculate the EBIT. 2. Calculate the net income. 3. Calculate the OCF. 4. What is the depreciation tax shield?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter6: Accounting For Financial Management
Section: Chapter Questions
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Provide this question solution general accounting

Consider the following income statement:
Sales
$602,184
Costs
$391,776
Depreciation $89,100
Taxes
32%
Required:
1. Calculate the EBIT.
2. Calculate the net income.
3. Calculate the OCF.
4. What is the depreciation tax shield?
Transcribed Image Text:Consider the following income statement: Sales $602,184 Costs $391,776 Depreciation $89,100 Taxes 32% Required: 1. Calculate the EBIT. 2. Calculate the net income. 3. Calculate the OCF. 4. What is the depreciation tax shield?
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