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How to determine earnings before interest and taxes

Assignment Help Taxation
Reference no: EM131794231

Problem

Here is the task: capital vs operating leases; Jan 2,2014 Daggar Corporation and Bayshore Company lease simular assets with the following charactics:

Economic life is 8 years

Term of lease is 5 years

Lease pymt is 20,000

FMV = $96,000

Each company has an incremental borrowing rate of 8% and a tax rate of 40%

Dagger capitalized their lease and Bayshore reports its lease as an operating lease both use straight line depreciation and both treat the lease as operational for Federal income tax purposes.

The question I have is how to determine earnings before interest and taxes without financial statements?

Reference no: EM131794231

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