Respuesta :
The earnings before income and tax(EBIT) at the break-even point is $7,236.
What is EBIT?
Earnings before interest and taxes (EBIT) refers to an indicator of a company's profitability. EBIT may be calculated as sales minus prices with the exception of tax and interest. EBIT is likewise called operating earnings, operating income, and income before interest and taxes.
As per the information, we need to calculate the earnings before income and tax at the break-even point.
The number of shares purchased:
= $38,000 / $18
= $2,111.11
Shares outstanding = 6,700 − 2,111.11
Shares outstanding = 4,588.89 shares
[tex]\rm\, \dfrac{EBIT}{6,700} =\dfrac{ [EBIT - \$38,000(0.06)]}{4,588.89 }\\\\EBIT = \$7,236[/tex]
Hence, the earnings before income and tax at the break-even point is $7,236.
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