Which of the Following Is the Correct Formula for Computing

question 22

Multiple Choice

Which of the following is the correct formula for computing NOPAT?

• A)NOPAT = Revenues × (1 + Tax Rate)
• B)NOPAT = Revenues × (1 - Tax Rate)
• C)NOPAT = EBITDA × (1 - Tax Rate)
• D)NOPAT = EBIT × (1 - Tax Rate)

---

Definitions:

Consolidated Net Income

The total net income of a parent company and all its subsidiaries, after eliminating inter-company transactions and dividends received from the subsidiaries.

Noncontrolling Interest

A minority stake in a company, held by investors or other companies that do not have control over business operations.

Valuation Basis

The method or approach used to determine the value of an asset or a company.

Investment Account

An account established to hold investments such as stocks, bonds, mutual funds, and other assets for long-term growth or income generation.