Question
At the end of last year, Shea Inc. reported the following income statement (in millions): Sales $3,000 Operating costs excluding depreciation $2,450 EBITDA $0,550 Depreciation
At the end of last year, Shea Inc. reported the following income statement (in millions): Sales $3,000 Operating costs excluding depreciation $2,450 EBITDA $0,550 Depreciation $0,250 EBIT $0,300 Interest $0,125 EBT $0,175 Taxes (40%) $0,070 Net Income $0,105 Looking ahead to the following year, the companys CFO has assembled this information: Year-end sales are expected to be 10% higher than the $3 billion in sales generated last year. Year-end operating costs, excluding depreciation, are expected to equal 80% of yearend 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 40%. On the basis of that information, what will be the forecast for Shea Inc.s year-end net income?
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