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Luther Corporation

Consolidated Income Statement

Year ended December 31 (in $millions)

	2006	2005
Total sales	610.1	562.8
Cost of sales	-500.2	-380.8
Gross profit	109.9	182
Selling, general, and administrative expenses	-40.5	-40.7
Research and development	-24.6	-23.4
Depreciation and amortization	-3.6	-3.3
Operating income	41.2	114.6
Other income	--	--
Earnings before interest and taxes (EBIT)	41.2	114.6
Interest income (expense)	-25.1	-14.1
Pretax income	16.1	100.5
Taxes	-5.5	-35.175
Net income	10.6	65.325
Price per share	$16	$15
Sharing outstanding (millions)	10.2	8.0
Stock options outstanding (millions)	0.3	0.2
Stockholders' Equity	126.6	63.6
Total Liabilities and Stockholders' Equity	533.1	386.7

Refer to the income statement above. Luther's operating margin for the year ending December 31, 2006 is closest to ________.

		24.43%
		20.36%
		6.75%
		16.29%

Luther Corporation

Consolidated Balance Sheet

December 31, 2006 and 2005 (in $ millions)

Assets	2006	2005	Liabilities and Stockholders' Equity	2006	2005
Current Assets			Current Liabilities
Cash	56.1	58.5	Accounts payable	88.1	73.5
Accounts receivable	54.5	39.6	Notes payable / short-term debt	10.9	9.6
Inventories	44.8	42.9	Current maturities of long-term debt	40.7	36.9
Other current assets	5.0	3.0	Other current liabilities	6.0	12.0
Total current assets	160.4	144.0	Total current liabilities	145.7	132.0
Long-Term Assets			Long-Term Liabilities
Land	66.8	62.1	Long-term debt	227	168.9
Buildings	108.5	91.5	Capital lease obligations
Equipment	117.1	99.6
Less accumulated depreciation	(54.4)	(52.5)	Deferred taxes	22.8	22.2
Net property, plant, and equipment	238	200.7	Other long-term liabilities	---	---
Goodwill	60.0	--	Total long-term liabilities	249.8	191.1
Other long-term assets	63.0	42.0	Total liabilities	395.5	323.1
Total long-term assets	361	242.7	Stockholders' Equity	125.9	63.6
Total Assets	521.4	386.7	Total liabilities and Stockholders' Equity	521.4	386.7

Refer to the balance sheet above. If in 2006 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share, then what is Luther's enterprise value?

		$540.0 million
		$771.4 million
		$521.4 million
		$385.7 million

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