Question

Cox Corporation recently reported an EBITDA of $66 million and $5 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.)

Answer 1

Answer:

$42.67 millions

Explanation:

The key to the answer is to find the tax. To do so, start from the net income (which is the result after tax). Divide this by 60% to get the earnings before tax and the apply the tax rate. You´ll get 3.3333... millions of tax. Once you have this just take the Ebitda of 66 mill and dedut the interest, tax, and net income and you´ll get the D & A.