In: Finance
Cox Corporation recently reported an EBITDA of $61 million and $10 million of net income. The company has $15 million interest expense and the corporate tax rate is 40.0% percent. What was the company's depreciation and amortization expense? (Answers are in $ millions.)
$56.00 |
$46.00 |
$51.00 |
$36.00 |
$29.33 |
Earnings before tax
Earnings before tax = Net Income / (1 - Tax rate)
= $10 Million / (1 – 0.40)
= $10 Million / 0.60
= $16.67 Million
Earnings before interest and tax
Earnings before interest and tax = Earnings before tax + Interest expenses
= $16.67 Million + $15 Million
= $31.67 Million
Company's depreciation and amortization expense
Company's depreciation and amortization expense = Earnings before interest, tax depreciation & amortization - Earnings before interest and tax
= $61.00 Million - $31.67 Million
= $29.33 Million
“Hence, the Company's depreciation and amortization expense will be $29.33 Million”
Earnings before tax
Earnings before tax = Net Income / (1 - Tax rate)
= $10 Million / (1 – 0.40)
= $10 Million / 0.60
= $16.67 Million
Earnings before interest and tax
Earnings before interest and tax = Earnings before tax + Interest expenses
= $16.67 Million + $15 Million
= $31.67 Million
Company's depreciation and amortization expense
Company's depreciation and amortization expense = Earnings before interest, tax depreciation & amortization - Earnings before interest and tax
= $61.00 Million - $31.67 Million
= $29.33 Million
“Hence, the Company's depreciation and amortization expense will be $29.33 Million”