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    SJMays07's Avatar
    SJMays07 Posts: 1, Reputation: 1
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    #1

    Jun 10, 2010, 10:14 AM
    Pearson Brothers recently reported an EBITDA of $9.5 million and net income of $2.7 m
    Pearson Brothers recently reported an EBITDA of $9.5 million and net income of $2.7 million. It had $2.0 million of interest expense, and its corporate tax rate was 40%. What was its charge for depreciation and amortization? Round your answer to the nearest dollar, if necessary.
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
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    #2

    Jun 10, 2010, 02:00 PM
    Ya got to show a little effort here, SJ...

    The spread between EBITDA and net income is made up of interest expense, income tax expense, and depreciation & amortization.

    The spread itself, and the interest expense amount, you're given explicitly. You may need a little help figuring the tax expense, because it's calculated after the deduction for D&A. But you get it started, then check back in if you need a boost with the tax component.
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