Chimaera Corp is expected to generate $100 million in EBITDA and incur $10 million in interest and $20 million in depreciation. What is the total impact of these expenses on its operating profit?

To determine the total impact of expenses on Chimaera Corp's operating profit, we start with the EBITDA figure and sequentially subtract the relevant costs.

Chimaera Corp is expected to generate $100 million in EBITDA, which stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. This figure does not account for interest expenses, depreciation, or taxes yet.

Next, we consider the depreciation expense of $20 million. This is a non-cash charge that reduces the operating income. Therefore, after accounting for depreciation, we can adjust the operating profit from EBITDA:

[

\text{Operating Profit} = \text{EBITDA} - \text{Depreciation} = 100 \text{ million} - 20 \text{ million} = 80 \text{ million}

]

Now, moving to the interest expense of $10 million, this is an expense that does not form part of the operating profit since operating profit is typically calculated before interest and taxes are deducted. While interest is an expense, we are only looking for the impact on operating profit excluding interest expenses.

However, the question specifically asks for the impact of expenses on operating profit, which for the purpose of this calculation