Calculate the ebit what is the depreciation tax, Financial Management

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Calculate the ebit what is the depreciation tax

Consider the following income statement for Chocoholics Ananymous: Sales $ 547,440 Fixed & Variable Costs $ 356,160 Depreciation $ 81,000 Taxes 30 % Dividends $ 50,000 Required:

(a) Calculate the EBIT.

(b) Calculate the net income. Recall that in this chapter the interest expense is assumed to be zero (projects are financed with equity).

(d) What is the depreciation tax shield? That is, how much money does the depreciation save the company each year?

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Financial Management: Calculate the ebit what is the depreciation tax

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