Equation: EBDAT= Revenues- Variable Costs- Cash fixed costs NOTE: Each small cup
ID: 2694778 • Letter: E
Question
Equation: EBDAT= Revenues- Variable Costs- Cash fixed costs NOTE: Each small cup of yogurt is sold for $3 and the cost of producing the frozen yogurt is $1.50 per cup. Admin. expenses, including Jen and Larry's salaries along with 2 other accountants were estimated to be $180,000 in 2013. Marketing expenses, advertising were projected to be $200,000 in 2013. Interest expenses were estimated at 15,000. The average tax rate is expected to be 25% of taxable income. Q: Jen and Larry believe that under the worst case scenario. yogurt revenues would be at the 2012 level of $600,000 even after plans and expenditures were put into place to increase revenues in 2013. What would happen to the Venture's EBDAT?Explanation / Answer
no of cups sold = 600,000/3 = 200,000
EBITA = 600,000 - 180,000 - 200,000 -15,000 - 1.5 * 200,000
EBITA = -95,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.