A Firm's Net Operating Profit After Taxes (NOPAT)is Calculated As

question 23

Multiple Choice

A firm's net operating profit after taxes (NOPAT) is calculated as:

• A)net profit
• B)EBIT times one minus the tax rate
• C)EBT minus interest paid
• D)EBIT times the tax rate

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Definitions:

Variable Expenses

Costs that change in proportion to the activity of a business.

Sales Revenues

The income received by a company from its sales of goods or the provision of services.

Absorption Costing

This refers to an accounting strategy that comprehensively adds the costs of direct materials, direct labor, and both varying and fixed overheads into the total cost of manufacturing a product.

Variable Costing

A pricing approach that incorporates solely the variable production expenses—such as direct materials, direct labor, and variable manufacturing overhead—into the unit cost of a product.