The revenue is $24,000, the cost of goods sold is $12,000, other expen

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

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.