Managerial Economics 12th Edition by Mark Hirschey

Exercise 3

OIBDA is an abbreviation for "operating income before depreciation and amortization." Like its predecessor EBITDA ("earnings before interest, taxes, depreciation, and amortization"), OIBDA is used to analyze profitability before noncash charges tied to plant and equipment investments. Can you see any advantages or disadvantages stemming from the use of OIBDA instead of net income as a measure of investment project attractiveness?