TBEP
Hello,
In the Excel Problems section for Odomirok.26-Taxes, I'm looking at the problem called Taxes 2. In the article, it says TBEP = EP + 20%Chg(UEP) = WP - 80%Chg(UEP).
In the solution, TBEP is calculated as WP - 80%Chg(UEP) = 8,490-.8(160)=8,362, which makes sense.
However, when I try calculating it as EP + 20%Chg(UEP), I get (8,490-1,610)+.2(160) = 6,912.
I'm confused whether these formulas are equivalent or not. Thank you in advance for the help.
Comments
In your second calc, you should have 8490 - (1610-1450), which is 8490 - 160.
WP = EP - change in UEP
That equivalence is simply algebraic:
EP + .2 chgUEP = (WP - chgUEP) + .2 chgUEP = WP = .8 chgUEP
Thank you for the explanation!
Sorry, looks like I messed up my formulas. Here it is again:
EP = WP - change in UEP
That equivalence is simply algebraic:
EP + .2 chgUEP = (WP - chgUEP) + .2 chgUEP = WP - .8 chgUEP