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21 November, 16:12

Tater and Pepper Corp. reported free cash flows for 2018 of $51.1 million and investment in operating capital of $34.1 million. Tater and Pepper incurred $14.8 million in depreciation expense and paid $25.3 million in taxes on EBIT in 2018. Calculate Tater and Pepper's 2018 EBIT.

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Answers (2)
  1. 21 November, 16:46
    0
    Tater and Pepper Corp

    computation of EBIT

    $million

    Free cash flow 51.1

    Add: Tax 25.3

    Investment in operating Capital 34.1 59.4

    110.5

    less: Depreciation expenses 14.8

    EBIT 95.7
  2. 21 November, 18:42
    0
    Earnings before interest and tax is $95.7 million

    Explanation:

    Earnings before interest and tax is the short form for earnings before interest and tax, which is net income of the company before considering paying interest obligation to bondholders and taxes payable to the relevant tax authorities whether state, federal or local authorities

    Earning's Before Interest and Taxes

    Operating cash flow = FCF + investment in Capital expenditure

    $51.1 million+$34.1million = 85.2 million

    OCF = EBIT - Taxes + Depreciation

    85.2 million = EBIT - 25.3 million + 14.8 million = ?

    EBIT = 95.7 million
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Home » Business » Tater and Pepper Corp. reported free cash flows for 2018 of $51.1 million and investment in operating capital of $34.1 million. Tater and Pepper incurred $14.8 million in depreciation expense and paid $25.3 million in taxes on EBIT in 2018.
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