Estimate a Firm's NOPAT Based On: Net Sales = $2,000,000;

question 25

Multiple Choice

Estimate a firm's NOPAT based on: Net sales = $2,000,000; EBIT = $600,000; Net income = $20,000; and Effective tax rate = 30%.

• A) $600,000
• B) $420,000
• C) $150,000
• D) $70,000
• E) $40,000

Grasp the concept of budgeted materials needed based on production and inventory requirements.

Understand how budgeted purchases are determined based on sales, inventory goals, and production needs.

Identify the key aspects of budget preparation, starting from sales forecasting to ending with cash and financial statement budgeting.

Recognize the importance of safety stock and its role in fulfilling customer demand.

---

Definitions:

Marginal Utility

The additional satisfaction or utility received by consuming one more unit of a good or service.

Total Utility

The total satisfaction received from consuming a given total quantity of a good or service.

Marginal Utility

The additional satisfaction or benefit received by consuming one more unit of a good or service.

Consumer Demand Curve

illustrates the relationship between the price of a good or service and the quantity demanded by consumers over a period, typically showing an inverse relationship.