Question 1

Determine the total operating fixed costs TOFC) based on the following: Administrative expenses = $200,000; Marketing expenses = $180,000; Depreciation expenses = $100,000; and Interest expenses = $20,000.
A) $200,000
B) $380,000
C) $400,000
D) $480,000
E) $500,000

Accepted Answer

Operating fixed costs include administrative, marketing, and depreciation expenses, totaling $480,000. Interest expenses are not included in operating costs.

Question 2

Find the NOPAT breakeven revenues NR) given the following information: total operating fixed costs = $75,000; variable costs = $150,000; and sales = $200,000.
A) $100,000
B) $240,000
C) $300,000
D) $400,000
E) $460,000

Accepted Answer

NOPAT breakeven revenues occur when operating income is zero. The contribution margin is sales minus variable costs, which is $200,000 - $150,000 = $50,000. To cover the fixed costs of $75,000, the sales must be $75,000 / ($50,000 / $200,000) = $300,000.

Question 3

Find the NOPAT given the following information: sales = $520,000, earnings before interest = $100,000; interest = $20,000; and the tax rate = 30%.
A) $70,000
B) $56,000
C) $30,000
D) $24,000
E) $10,000

Accepted Answer

NOPAT (Net Operating Profit After Tax) is calculated as EBIT (Earnings Before Interest and Taxes) minus taxes. Taxes are calculated on EBIT, not on earnings after interest. So, NOPAT = EBIT * (1 - Tax Rate) = $100,000 * (1 - 0.30) = $70,000.

Quiz 4: Preparing and Using Financial Statements

Determine the total operating fixed costs TOFC) based on the following: Administrative expenses = $200,000; Marketing expenses = $180,000; Depreciation expenses = $100,000; and Interest expenses = $20,000.

Find the NOPAT breakeven revenues NR) given the following information: total operating fixed costs = $75,000; variable costs = $150,000; and sales = $200,000.

Find the NOPAT given the following information: sales = $520,000, earnings before interest = $100,000; interest = $20,000; and the tax rate = 30%.