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postnew [5]
3 years ago
14

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
Business
1 answer:
labwork [276]3 years ago
8 0

Answer:

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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Answer:

The answer is B.

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8 0
2 years ago
To guide cost allocation decisions, the ability to bear criterion ________.
hoa [83]

Answer:

the answer is D

Explanation:

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1.   To provide information for economic decisions.

2.   To motivate managers and employees.

3.   To justify costs or compute reimbursement.

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Exhibit 14-2 lists four criteria used to guide cost allocation decisions:

1.   Cause and effect.

2.   Benefits received.

3.   Fairness or equity.

Ability to bear. The cause-and-effect criterion and the benefits-received criterion are the dominant criteria when the purpose of the allocation is related to the economic decision purpose or the motivation purpose. Using the levels approach introduced in Chapter 7, the salesvolume variance is a Level 2 variance. By sequencing through Level 3 (salesmix and salesquantity variances) and then Level 4 (marketsize and marketshare variances), managers can gain insight into the causes of a specific sales-volume variance caused by changes in the mix and quantity of the products sold as well as changes in market size and market share. The total salesmix variance arises from differences in the budgeted contribution margin of the actual and budgeted sales mix. The composite unit concept enables the effect of individual product changes to be summarized in a single intuitive number by using weights based on the mix of individual units in the actual and budgeted mix of products sold. A favorable salesquantity variance arises because the actual units of all products sold exceed the budgeted units of all products sold. The salesquantity variance can be decomposed into (a) a marketsize variance (because the actual total market size in units is different from the budgeted market size in units), and (b) a market share variance (because the actual market share of a company is different from the budgeted market share of a company). Both variances use the budgeted average contribution margin per unit.

8 0
3 years ago
Suppose there are only two firms that sell smartphones: Flashfone and Pictech. The payoff matrix that follows shows the profit (
Vladimir [108]

Answer:

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Explanation:

a) Data and Calculations:

                                Pictech  

                          High         Low

             High     8   8        3  10

Flashfone

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b) By acting at the Nash equilibrium and pricing their smartphones high, Pictech and Flashfone achieve a payoff of $8 million respectively.  This payoff level does not put any of the two firms at a disadvantage.

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Luden [163]

Answer:

c. procedural justice.

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