Use the information for the question(s)below.
Shepard Industries is evaluating a proposal to expand its current distribution facilities.Management has projected the project will produce the following cash flows for the first two years (in millions).
-The incremental EBIT for the Shepard Industries project in year two is closest to:
A)$415 million.
B)$875 million.
C)$595 million.
D)$510 million.

Question

Use the information for the question(s)below.
Shepard Industries is evaluating a proposal to expand its current distribution facilities.Management has projected the project will produce the following cash flows for the first two years (in millions). 
-The incremental EBIT for the Shepard Industries project in year two is closest to:
A)$415 million. 
B)$875 million. 
C)$595 million. 
D)$510 million.

Quizplus · Accepted Answer

The incremental EBIT (Earnings Before Interest and Taxes) is calculated by taking the revenue minus the operating expenses, depreciation, and any other relevant costs for the project in year two. Based on the given choices, $595 million is the closest estimate for the incremental EBIT for Shepard Industries in year two.

Use the Information for the Question(s)below