Blue Mountain is considering the installation of a new computerized pressure cooker that will cut annual...
Blue Mountain is considering the installation of a new computerized pressure cooker that will cut annual operating costs by $23,000. The system will cost $39,900 to purchase and install. This system is expected to have a 4-year life and will be depreciated to zero using straight-line depreciation. What is the amount of the earnings before interest and taxes (EBIT) for this project? $10,525 $13,025 $15,525 $16,900
Homework Answers
B. $13,025
Earnings before interest and taxes = $23,000 - ($39,900/4) = $13,025
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