In year three, Elton llc had EBIT of 200, taxes of 40% and cash flow of 145 . Wh

Question

In year three, Elton llc had EBIT of 200, taxes of 40% and cash flow of 145 . What was depreciation for year three ? A. 20 B. 25 C. 30 D none of the above In year three, Elton llc had EBIT of 200, taxes of 40% and cash flow of 145 . What was depreciation for year three ? A. 20 B. 25 C. 30 D none of the above In year three, Elton llc had EBIT of 200, taxes of 40% and cash flow of 145 . What was depreciation for year three ? A. 20 B. 25 C. 30 D none of the above A. 20 B. 25 C. 30 D none of the above

Explanation / Answer

After-Tax Cash Flow = EBIT(1 - T) + Depreciation

145 = 200(1 - 0.4) + Depreciation

145 = 120 + Depreciation

Depreciation = 145 - 120 = 25

Hence, Option "B" is correct.

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