Free cash flow is Rs 17000 and net investment in operating capital is Rs 10000 then net operating profit after taxes would be

Rs 7,000.00
Rs 27,000.00
-Rs 27,000.00
-Rs 7,000.00

The correct answer is A. Rs 7,000.00.

Free cash flow (FCF) is the cash that a company generates from its operations after taking into account capital expenditures. Net investment in operating capital (NIOC) is the amount of money that a company needs to invest in its operations in order to maintain its current level of production.

To calculate net operating profit after taxes (NOPAT), we can use the following formula:

NOPAT = FCF – NIOC

In this case, we are given that FCF is Rs 17,000 and NIOC is Rs 10,000. Substituting these values into the formula, we get:

NOPAT = 17,000 – 10,000 = 7,000

Therefore, the net operating profit after taxes is Rs 7,000.

Option B is incorrect because it is the value of FCF, not NOPAT. Option C is incorrect because it is the negative of the value of FCF. Option D is incorrect because it is the negative of the value of NIOC.

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