Question

estion textbae inc. has the following income statement. how much net operating profit after taxes (nopat) does the firm have?sales$2,000.00costs1,200.00depreciation 100.00ebit$ 700.00interest expense 200.00ebt$ 500.00taxes (35%) 175.00net income$ 325.00question 5answera.$432.25b.$455.00c.$390.11d.$370.60e.$410.64

Answer 1

Net Operating Profit After Taxes (NOPAT) is calculated by multiplying Earnings Before Interest and Taxes (EBIT) by one minus the tax rate. For Bae Inc., with an EBIT of $700.00 and a tax rate of 35%, the NOPAT is $455.00.

Step-by-step explanation:

The Net Operating Profit After Taxes (NOPAT) for Bae Inc. can be calculated by taking the Earnings Before Interest and Taxes (EBIT) and subtracting the taxes that would be paid on that income. NOPAT is a measure of a company's profitability that excludes the costs and tax benefits of debt financing by focusing on the company's core operations.

To calculate NOPAT, use the following formula:

NOPAT = EBIT x (1 - Tax Rate)

In the case of Bae Inc., EBIT is $700.00 and the tax rate is 35%:

NOPAT = $700.00 x (1 - 0.35) = $700.00 x 0.65 = $455.00

Therefore, the NOPAT for Bae Inc. is $455.00.