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.

Question

Quizplus · Accepted Answer

Net operating profit after taxes (NOPAT) = Operating profit * (1 - Tax rate)
= $100,000 * (1 - 0.30)
= $70,000

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