This posting addresses earnings before taxes (EBT).
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Auton, Inc. a manufacturer of robots had total revenues of $2,000,000 in the year ending 2011 with an operating cost of $1,000,000. The company's earnings are taxed at 30% and its annual interest expenses were $300,000. The only depreciable asset the company owns is a specialized machine that it bought for $1,000,000 and is depreciating over 5 years using the straight line method. What is the firm's EBT?
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Solution Summary
The solution shows the exact calculation for the EBT calculation of Auton, Inc.
Solution Preview
Revenue: 2,000,000
Expenses: 1,000,000
Gross profit = 1,000,000
Interest expenses = ...
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