Answer:
The earnings before interest and taxes under the base-case scenario is $395,000
Explanation:
For computing the EBIT we have to use the equation which is shown below:
EBIT = Sales revenue - variable cost - fixed cost - depreciation expense
Where,
Sales revenue = Number of units × Selling price per unit
= 12,500 units × $69 per unit
= $862,500
Variable cost = Number of units × variable cost per unit
= 12,500 units × $13 per unit
= $162,500
And, the other items values remain the same
Now put these values to the above formula
So, the value would equal to
= $862,500 - $162,500 - $237,000 - $68,000
= $395,000
