CumChan Corporation had operating income (EBIT) of $2,500,000 in 2005, depreciation expenses of $500,000, and dividends paid of $400,000.What is CumChan's operating cash flow (EBITDA) for 2005?

Question

Quizplus · Accepted Answer

Operating cash flow (EBITDA) is calculated by adding depreciation back to EBIT. Thus, $2,500,000 (EBIT) + $500,000 (depreciation) = $3,000,000.

CumChan Corporation Had Operating Income (EBIT) of $2,500,000 in 2005