Income StatementTalbot Enterprises recently reported an EBITDA of $6.0 million and net income of...

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Income StatementTalbot Enterprises recently reported an EBITDA of $6.0 million and net income of $1.8 million. It had $1.98 million of interest expense, and its corporate tax rate was 40%. What was its charge for depreciation and amortization? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000.

David · Accepted Answer

Ans 1 
EBITDA  = $6 million 
Net Income  = $1.8 million 
Interest Income = $1.98 million 
Tax rate  = 40% 
Hence, 
PBT = EBITDA – Interest Income – Depreciation 
 = 6 – 1.98 – D 
 = 4.02 – D 
Now, 
PAT   = 1.8 
PBT*(1 – T)  = 1.8 
(4.02 – D)*(1 – 0.4) = 1.8 
(4.02 – D)*0.6  = 1.8 
4.02 – D  = 3 
D   = 4.

Income Statement Talbot Enterprises recently reported an EBITDA of $6.0 million and net income of $1.8 million. It had $1.98 million of interest expense, and its corporate tax rate was 40%. What was...

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