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1 cumonds Industries is forecasting the following income statement Sales $5,000,000 Operating costs excluding depreciation & amortization 2,750,000 EBITDA $2,250,000 Depreciation and amortization 700,000 EBIT
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cumonds Industries is forecasting the following income statement Sales $5,000,000 Operating costs excluding depreciation & amortization 2,750,000 EBITDA $2,250,000 Depreciation and amortization 700,000 EBIT $1,550,000 Interest 250,000 EBT $1,300,000 Taxes (25%) 325,000 Net income $975,000 The CEO would like to see higher sales and a forecasted net income of $1,270,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 5%. The tax rate, which is 25%, will remain the same. (Note that while the tax rate remains constant, the taxes paid will change.) What level of sales would generate $1,270,000 in net income? Round your answer to the nearest dollar, if necessaryStep by Step Solution
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