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15 June, 17:56

Mandalay Resorts had revenue of $2,462, income from continuing operation of $53, provision for income tax of $40, interest expense of $230, & depreciation & amortization of $216 (all in millions). Mandalay had EBIT (in millions) of: a. $539 b. $323 c. - $217 d. $1,923

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  1. 15 June, 18:17
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    The correct answer is D

    Explanation:

    The formula to compute the EBIT (Earnings before Interest and Tax) is as:

    EBIT (Earnings before Interest and Tax) = Revenue - Provision for income tax - amortization and depreciation - Interest expense - income from continuing operation

    where

    Revenue is $2,462

    Depreciation and amortization is $216

    Provision for income tax is $40

    Income from continuing operation is $53

    Interest expense is $230

    Putting the values above:

    EBIT = $2,462 - $216 - $230 - $53 - $40

    EBIT = $1,923
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