The following are the financial information of Kerung company: NOPAT 8,250,000 EBITDA 17,725,000 Net income 5,050,000 Capital expenditures 6,820,000 Tax rate 40% DO NOT ROUND OFF DURING COMPUTATIONS 1. Calculate the company's depreciation and amortization expense 2. Calculate its interest expense (2 decimal places) 3. Calculate its EVA (2 decimal places)
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
The following are the financial information of Kerung company:
NOPAT 8,250,000
EBITDA 17,725,000
Net income 5,050,000
Capital expenditures 6,820,000
Tax rate 40%
DO NOT ROUND OFF DURING COMPUTATIONS
1. Calculate the company's
2. Calculate its interest expense (2 decimal places)
3. Calculate its EVA (2 decimal places)
Step by step
Solved in 4 steps
