For a levered firm, EBIT is equivalent to:
A. Net income
B. Pro forma earnings
C. Operating profit
D. Net income before taxes
Answer: C. Operating profit
Explanation: EBIT stands for earnings before interest and taxes. This is calculated by taking net income and adding back interest expense and taxes. EBIT is the equivalent of operating profits, which only measures the net profit earned from a company's core business operations (it excludes interest and taxes). Pro forma earnings are projected earnings.
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The management of Buelow Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity rather than on the estimated amount of activity for the year. The company's controller has provided an example to illustrate how this new system would work. Estimated activity for the upcoming year 76,000machine-hoursCapacity 94,000machine-hoursActual activity for the year 82,800machine-hoursManufacturing overhead (all fixed)$5,572,320per year Job Q58A, which required 130 machine-hours, is one of the jobs worked on during the year. Required:a. Determine the predetermined overhead rate if the predetermined overhead rate is based on the estimated activity for the upcoming year.b. Determine how much overhead would be applied to Job
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A court order requiring that a person do or refrain from doing a particular act is known as a(n):
A) injunction. B) maxim. C) statute. D) executive order.
What happens when a U.S. company sells goods denominated in a foreign currency and the foreign currency depreciates?
What will be an ideal response?