Question: Here are the values I have been given. EBT 2019 = 600,000 EBT 2020 = 790,000 EBIT 2019 = 800,000 EBIT 2020 = 2,740,000 a)

Here are the values I have been given.

EBT 2019 = 600,000 EBT 2020 = 790,000

EBIT 2019 = 800,000 EBIT 2020 = 2,740,000

a) Compute combined corporate taxes for Company Corp for both 2019 and 2020. Here are two additional facts about Company Corp. 1) According to Canada Revenue it is a small corporation. 2) It is based in P.E.I and thus pays only 10% federal and 3.5% provincial tax on the first $500,000 it earns, and then pays 15% federal and 16% provincial tax on the remainder.

b) Calculate the NOPAT for 2019 and 2020.

I know that the formula for NOPAT is EBIT - (1 - tax rate), but I got no clue how to use this formula given that the tax rates I am working with is not consistent.

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