Razorback, Inc., which has no debt financing, has the following income statement and statement of cash flow information.

Total operating expenses $ 49,000,000

Depreciation expense $ 3,000,000

Amortization of software development costs $ 1,100,000

Net income $10,000,000

Cash flow used in investing activities $ 8,000,000 (a)

(a) Includes software development expenses of $ 3,500,000

Razorback has a current stock price of $26 per share and 15 million shares of common stock outstanding.

What would the company's price / earnings ratio be if it expensed rather than amortized the software development costs?

Assume that the company's current effective tax rate of 30% would not change.

	a.	46.9
	b.	42.6
	c.	44.5
	d.	39.0
	e.	49.1