Computation of depreciation expense and what is laihos, Ask an Expert

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Computation of Depreciation expense.

Laiho Industries reported the following information in its annual report:

• Net income = $7.0 million.

• NOPAT = $60 million.

• EBITDA = $120 million.

• Net profit margin = 5.0%.

Laiho has a depreciation expense, but no amortization expense. Laiho has $300 million in operating capital, its after-tax cost of capital is 10%, and the firm's tax rate is 40%.What is Laiho's depreciation expense?

1. a. $20.0 million

2. b. $30.0 million

3. c. $53.0 million

4. d. $60.0 million

5. e. $77.1 million

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Basic Finance, Finance

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