A company has the following income statement What is its net

A company has the following income statement. What is its net operating profit after taxes (NOPAT)? Sales $3,000 1,600 650 S 1,750 Costs Depreciation EBIT Interest expense EBT Taxes (40%) Net income s 1,300 s 960 S 1050 s 1290 $740 s720

Solution

NOPAT = EBIT * (1-Tax rate) = 1750 * (1-40%) = 1050

Correct option is 1050

Net operating profit after tax not considers the impact of interest expense.