CFAI mock morning Q 48

CFA Level I FRA
#1

Can someone please help out? I don’t get why the interest expense of 200 is not deducted to get the operating profit. Answer is B i guessed A.

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#2

Interest expense is calculated after Operating Income (EBIT). Had they asked for EBT or NI, Interest expense would be deducted:

Rev

  • Exp

= Gross Profit

_- Operating Expense_s

= EBIT

-Interest

= EBT

#3

Interest expense is not an operating expense.

(However, under US GAAP, interest paid is an _ operating cash flow _. Sigh.)

#4

Thanks as always…I hope I remember things like this on the exam.

#5

Can anyone find in the book where it states Restructuring Costs is operating one in GAAP? I cannot find it in the Schweser notes.