Earnings before taxes are computed by deducting the firm's interest expense from its ____ income.
A) total
B) projected
C) net
D) operating

Question

Quizplus · Accepted Answer

Earnings before taxes (EBT) is calculated by subtracting interest expense from operating income. Operating income is the amount of revenue generated by a company's regular business activities, excluding any income earned from investments or other sources outside of the main business operations.

Earnings Before Taxes Are Computed by Deducting the Firm's Interest