When solving for EBIT, What kind of algebra do I use?
I replaced EBIT with x.
The equation is:
(x-0)(1-.4)/80,000=(x-153,400)(1-.4)/40,000
To solve for EBIT (Earnings Before Interest and Taxes), you can use basic algebraic principles. Here's a step-by-step guide on how to solve the given equation:
1. Start by simplifying the equation on both sides. Expand the numerator on both sides of the equation using the distributive property:
((x - 0) (1 - 0.4)) / 80,000 = ((x - 153,400) (1 - 0.4)) / 40,000
2. Simplify the expressions within parentheses:
(x * 0.6) / 80,000 = (x * 0.6 - 61,360) / 40,000
3. Eliminate the denominators by multiplying both sides of the equation by the LCD (Lowest Common Denominator), which is 80,000 * 40,000 = 3,200,000,000:
(3,200,000,000 * (x * 0.6)) / 80,000 = (3,200,000,000 * (x * 0.6 - 61,360)) / 40,000
4. Apply the distributive property by multiplying the numerator:
(1,920,000,000x) / 80,000 = (1,920,000,000x - 195,993,600) / 40,000
5. Cross-multiply to eliminate fractions:
(1,920,000,000x) * 40,000 = (1,920,000,000x - 195,993,600) * 80,000
6. Expand and simplify both sides of the equation:
76,800,000,000x = 153,600,000,000x - 15,679,488,000
7. Move the x terms to one side of the equation and the constant terms to the other side:
76,800,000,000x - 153,600,000,000x = -15,679,488,000
8. Combine like terms:
-76,800,000,000x = -15,679,488,000
9. Divide both sides of the equation by -76,800,000,000 to solve for x:
x = -15,679,488,000 / -76,800,000,000
10. Simplify or approximate the final result as needed to find the value of x (EBIT).
Remember to double-check your calculations and make sure you follow the correct order of operations when working with algebraic equations.