Last year, Sharpe Radios had net operating profit after-taxes (NOPAT) of $7.8 million. Its EBITDA was $15.5 million and net income amounted to $3.8 million. During the year, Sharpe Radios made $5.5 million in net capital expenditures (that is, capital expenditures net of depreciation). Finally, Sharpe Radios’ finance staff has concluded that the firm’s total after-tax capital costs were $5.9 million and its tax rate was 40 percent. a. What is Sharpe Radios’ depreciation and amortization expense? b. What is Sharpe Radios’ interest expense? c. What is Sharpe Radios’ free cash flow?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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Last year, Sharpe Radios had net operating profit after-taxes (NOPAT) of $7.8 million. Its EBITDA was $15.5 million and net income amounted to $3.8 million. During the year, Sharpe Radios made $5.5 million in net capital expenditures (that is, capital expenditures net of depreciation). Finally, Sharpe Radios’ finance staff has concluded that the firm’s total after-tax capital costs were $5.9 million and its tax rate was 40 percent.
a. What is Sharpe Radios’ depreciation and amortization expense?
b. What is Sharpe Radios’ interest expense?
c. What is Sharpe Radios’ free cash flow?
d. What is Sharpe Radios’ EVA?

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