Western Electric reported the following results for 2017: $$\begin{array} { l r }
\text { Sales } & \$ 8,400,000 \
\text { Investment turnover } & 2.5 \
\text { Return on investment } & 12 \%
\end{array}$$ Given this information, how much is the company's NOPAT?
A)$1,008,000
B)$2,520,000
C)$403,200
D)$3,360,000

Question

Western Electric reported the following results for 2017: $$\begin{array} { l r } 
\text { Sales } & \$ 8,400,000 \
\text { Investment turnover } & 2.5 \
\text { Return on investment } & 12 \%
\end{array}$$ Given this information, how much is the company's NOPAT?
A)$1,008,000
B)$2,520,000
C)$403,200
D)$3,360,000

Quizplus · Accepted Answer

NOPAT (Net Operating Profit After Tax) can be calculated using the formula: NOPAT = Sales / Investment Turnover * Return on Investment. Plugging in the values: NOPAT = $8,400,000 / 2.5 * 12% = $403,200.