INTERMEDIATE FINANCIAL MANAGEMENT
INTERMEDIATE FINANCIAL MANAGEMENT
14th Edition
ISBN: 9780357516669
Author: Brigham
Publisher: CENGAGE L
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Chapter 6, Problem 7P
Summary Introduction

Adequate information:

Corporation’s earnings before interest and taxes are $4 million.

The federal-plus-state-tax rate is 25% .

To compute: The net operating profit after taxes (NOPAT)

Introduction: A financial metric called net operating profit after tax (NOPAT) demonstrates how well a business fared through its core operations after deducting taxes. It is a more precise way to assess operating efficiency for leveraged organizations and is widely utilized in economic value-added (EVA) calculations. NOPAT does not account for the tax benefits as a result of the existing debt that many corporations receive.

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