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20 July, 22:53

EP Enterprises has the following income statement. How much net operating profit after taxes (NOPAT) does the firm have?

Sales $ 2,000.00

Costs 1,400.00

Depreciation 250.00

EBIT $ 350.00

Interest expense 70.00

EBT $ 280.00

Taxes (25%) 112.00

Net income $ 168.00

Options:

a. $260.50 b. $258.50 c. $262.50 d. $256.50 e. $254.50

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Answers (1)
  1. 20 July, 23:21
    0
    Option (c) is correct.

    Explanation:

    Given that,

    Sales = $ 2,000.00

    Costs = 1,400.00

    Depreciation = 250.00

    EBIT = $ 350.00

    Interest expense = 70.00

    EBT = $280.00

    Taxes (25%) = 112.00

    Net income = $168.00

    Net operating profit after taxes (NOPAT):

    = EBIT * (1 - tax rate)

    = $350 * (1 - 25%)

    = $350 * 0.75

    = $262.50

    Therefore, the net operating profit after taxes (NOPAT) is $262.5.
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