Hermann Industries is forecasting the following income statement for the upcoming year:

Income statement Sales Operating costs (excluding depreciation and amortization)

EBITDA Depreciation and amortization EBIT Interest EBT Taxes (40%)

Net income

$8,000,000 4,400,000

$3,600,000 800,000

$2,800,000 600,000

$2,200,000 880,000

$1,320,000 The company's CEO is disappointed with the forecast and would like to see Hermann generate higher sales and a forecasted net income of $2,500,000.
Assume that operating costs (excluding depreciation and amortization) are always 55 percent of sales. Assume that the company's depreciation and amortization and interest expenses will increase by 10 percent from what they are now. The company's tax rate, which is 40 percent, will remain the same. What level of sales would the firm have to obtain to generate $2,500,000 in net income?