Altus Minerals recently reported $2,850 of sales, $1,300 of operating costs other than depreciation, and $250 of depreciation. The company also has an interest expense of $70 and a tax rate of 40%. How much after-tax operating income (NOPAT) does the firm have? Your answer should be between 670 and 885, rounded to even dollars (although decimal places are okay), with no special characters.
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Solution:
Net Operating Profit after Tax (NOPAT) refers to the operating profit of a business after deducting tax expense from it.
So, NOPAT = Earnings before interest and taxes x (1-Tax rate)
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