The revenue is $24,000, the cost of goods sold is $12,000, other expenses (from selling and administration) are $6,000, and depreciation is $2,000. What is the EBIT?
A) $12,000
B) $6,000
C) $4,000
D) $2,000
Answer: C
Explanation: C) EBIT = Revenue - Cost of Goods Sold - Other Expenses - Depreciation
= $24,000 - $12,000 - $6,000 - $2,000 = $4,000. Interest is not considered when computing the EBIT.
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