What is the formula for calculating net income (NI)?

To determine the net income (NI), it's essential to understand how it is derived from earnings before interest and taxes (EBIT), adjusted for taxes. The process involves taking EBIT, which is a measure of a company's profitability from its operations, and adjusting it for the tax impact.

The formula NI = EBIT (1 - T) correctly captures this relationship, where T represents the tax rate. By multiplying EBIT by (1 - T), you are effectively deducting the proportion of EBIT that is paid in taxes, allowing you to arrive at net income. This shows how much of the operating earnings remain after fulfilling tax obligations, which is critical for assessing a company's profitability.

In contrast, other options presented do not reflect the accurate calculation or conceptual understanding of net income. Revenue minus expenses does provide a broad sense of profit but fails to specifically account for taxes and has no direct incorporation of EBIT. The other choices related to OCF or specific deductions like depreciation and taxes do not align directly with the formal definition of net income that includes the effect of tax expenses on operating income.

Thus, the appropriate formula that relates to net income, taking into account earnings and the tax burden, is indeed NI = EBIT (1 - T).