Problem:
Laiho Industries reported following information in its annual report:
• Net income = $7.0 million.
• NOPAT = $60 million.
• EBITDA = $120 million.
• Net profit margin = 5.0%.
Laiho has depreciation expenditure, but no amortization expenditure. Laiho has $300 million in operating capital, its after-tax cost of the capital is 10%, and the firm’s tax rate is the 40%.What is Laiho’s depreciation expenditure show your computation?
a. $20.0 million
b. $30.0 million
c. $53.0 million
d. $60.0 million
e. $77.1 million