The revenue is $40,000, the cost of goods sold is $26,000, the selling, general and administrative expenses are $7,000, interest expense is $2,000, and depreciation is $3,000. What is the EBIT?
A) $2,000
B) $4,000
C) $7,000
D) $14,000
Answer: B
Explanation: B) EBIT = Revenue - (CGS + SGA Expenses + Depreciation)
= $40,000 - ($26,000 + $7,000 + $3,000) = $4,000.
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