Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
At the end of last year, Roberts Inc. reported the following income statement (in millions of dollars): Sales $3,000 Operating costs excluding depreciation 2,450 EBITDA
At the end of last year, Roberts Inc. reported the following income statement (in millions of dollars):
Sales | $3,000 |
Operating costs excluding depreciation | 2,450 |
EBITDA | $550 |
Depreciation | 250 |
EBIT | $300 |
Interest | 124 |
EBT | $176 |
Taxes (25%) | 44 |
Net income | $132 |
Looking ahead to the following year, the company's CFO has assembled this information:
- Year-end sales are expected to be 5% higher than the $3 billion in sales generated last year.
- Year-end operating costs, excluding depreciation, are expected to equal 80% of year-end sales.
- Depreciation is expected to increase at the same rate as sales.
- Interest costs are expected to remain unchanged.
- The tax rate is expected to remain at 25%.
On the basis of that information, what will be the forecast for Roberts' year-end net income? Enter your answer in millions. For example, an answer of $25,400,000 should be entered as 25.40. Do not round intermediate calculations. Round your answer to two decimal places.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started