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2 June, 22:28

EP Enterprises has the following income statement. How much net operating profit after taxes (NOPAT) does the firm have? Sales $ 3,900.00 Costs 1,400.00 Depreciation 250.00 EBIT $ 2,250.00 Interest expense 70.00 EBT $ 2,180.00 Taxes (25%) 872.00 Net income $ 1,308.00 a. $1,685.50 b. $1,691.50 c. $1,689.50 d. $1,687.50 e. $1,683.50

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  1. 3 June, 01:57
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    Option (d) is correct.

    Explanation:

    Given that,

    Sales = $ 3,900.00

    Costs = 1,400.00

    Depreciation = 250.00

    EBIT = $ 2,250.00

    Interest expense = 70.00

    EBT = $ 2,180.00

    Taxes (25%) = 872.00

    Net income = $ 1,308.00

    Hence,

    Net operating profit after taxes:

    = EBIT * (1 - tax rate)

    = $2,250.00 * (1 - 25%)

    = $2,250.00 * 0.75

    = $1,687.5

    Therefore, the net operating profit after taxes (NOPAT) is $1,687.5.
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