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

Question

Quizplus · Accepted Answer

NOPAT (Net Operating Profit After Taxes) is calculated as Earnings Before Interest and Taxes (EBIT) minus taxes. Here, EBIT = $100,000. Taxes on EBIT = 30% of $100,000 = $30,000. Thus, NOPAT = $100,000 - $30,000 = $70,000.

Find the NOPAT Given the Following Information: Sales = $520,000;