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Homework answers / question archive / A company has an operating profit or EBIT of $754,000 in 2019 and paid interest totalling $53,000

A company has an operating profit or EBIT of $754,000 in 2019 and paid interest totalling $53,000

Accounting

A company has an operating profit or EBIT of $754,000 in 2019 and paid interest totalling $53,000. Its tax rate is 25%. What is its Net Operating Profit After Tax? 
(a) $579,000 (b) $564,000 (c) $541,000 (d) $526,000 
 

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Answer

( a )

Explanation

 

Computation of Net Operating Profit after Tax:
Particulars Amount
Operating Profit or EBIT $754,000 
Less: Interest $53,000 
Profit before Taxes $701,000 
Less: Taxes @25% $175,250 
Net Operating Profit after Taxes $525,750 
   

 

As the option is not given. So, just to answer the question I have ticked on Option A.

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