Estimate a Firm's NOPAT Based on the Following Information: Net

question 63

Multiple Choice

Estimate a firm's NOPAT based on the following information: 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

---

Definitions:

Cash Loan

A short-term loan provided to a borrower in cash, meant to be repaid with interest over a predetermined period.

Interest Collected

The amount of interest payments received by a lender from a borrower over a specified period of time.

Percent of Receivables Method

A method used in accounting to estimate bad debts expense based on a percentage of accounts receivable judged to be uncollectible.

Unadjusted Trial Balance

A financial report that shows the balances of all accounts, including assets, liabilities, equity, income, and expenses before any adjustments are made for the accounting period.