Question

Cullumber Corporation recently reported an EBITDA of $30.70 million and net income of $9.7 million. The company had $6.8 million in interest expense, and it's average corporate tax rate was 35 percent. What was its depreciation and amortization expense

Answer 1

$9.7 million

Step-by-step explanation:

Calculation to determine depreciation and amortization expense

EBITDA 30.7 million

Less:Depreciation and amortization expense(balance) ($8976923.08,)

(30.7-21.7230769)

EBIT $8976923.08

(14.9230769+6.8)

Less:interest expense (6.8 million)

EBT 14.9230769 million

(100%)(9.7/0.65)

Less:tax 35%(14.9230769*35%) 5.2230769 million

Net income(65%) 9.7 million

Therefore depreciation and amortization expense will be 9.7 million