Calculate Net Operating Profit After Taxes (NOPAT) If a Firm

question 160

Multiple Choice

Calculate net operating profit after taxes (NOPAT) if a firm has sales of $1,000,000, operating profit (EBIT) of $100,000, interest expense of $50,000, and a tax rate of 30%.

• A) $35,000.
• B) $700,000.
• C) $70,000.
• D) none of the above.

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Definitions:

Retirement Income

The total earnings an individual receives after retiring from work, which can come from pensions, savings, investments, or government benefits.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows or the rate charged by central banks for loans to commercial banks.

Cash Flows

The total figure of money being moved into and extracted from a business, critically affecting its liquid assets.

Rate Of Return

The gain or loss of an investment over a specified period, expressed as a percentage.