Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

At the end of last year, Edwin Inc. reported the following income statement (in millions of dollars): Sales $4,200 Operating costs excluding depreciation 3,044 EBITDA

At the end of last year, Edwin Inc. reported the following income statement (in millions of dollars):

Sales $4,200
Operating costs excluding depreciation 3,044
EBITDA $1,156
Depreciation 330
EBIT $826
Interest 130
EBT $696
Taxes (40%) 278
Net income $418

Looking ahead to the following year, the company's CFO has assembled this information:

  • Year-end sales are expected to be 6% higher than $4.2 billion in sales generated last year.
  • Year-end operating costs, including depreciation, are expected to increase at the same rates as sales.
  • Interest costs are expected to remain unchanged.
  • The tax rate is expected to remain at 40%.

On the basis of this information, what will be the forecast for Edwin's year-end net income? Round your answer to the nearest whole million. Do not round intermediate calculations. Enter all values as positive numbers.

(in millions of dollars)
Sales $
Operating costs including depreciation
EBITDA $
Depreciation
EBIT $
Interest
EBT $
Taxes
Net income $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cybersecurity In Finance

Authors: Sylvain Bouyon, Simon Krause

1st Edition

1786612178, 9781786612175

More Books

Students also viewed these Finance questions

Question

Which of the following is NOT a relational operator? 1. =

Answered: 1 week ago