December 31, 3-15 INCOME STATEMENT Edmonds Industries is forecasting the following income statement: Sales Operating costs...

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December 31, 3-15 INCOME STATEMENT Edmonds Industries is forecasting the following income statement: Sales Operating costs excluding depreciation and amortization EBITDA Depreciation and amortization EBIT Interest $10,000,000 5,500,000 $ 4,500,000 EBT Taxes (40%) Net income 1,200,000 $ 3,300,000 500,000 $ 2,800,000 1,120,000 $ 1,680,000 The CEO would like to see higher sales and a forecasted net income of $2,100,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 6%. The tax rate, which is 40%, will remain the same. (Note that while the tax rate remains constant, the taxes paid will change.) What level of sales would generate $2,100,000 in net income? December 31, 3-15 INCOME STATEMENT Edmonds Industries is forecasting the following income statement: Sales Operating costs excluding depreciation and amortization EBITDA Depreciation and amortization EBIT Interest $10,000,000 5,500,000 $ 4,500,000 EBT Taxes (40%) Net income 1,200,000 $ 3,300,000 500,000 $ 2,800,000 1,120,000 $ 1,680,000 The CEO would like to see higher sales and a forecasted net income of $2,100,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 6%. The tax rate, which is 40%, will remain the same. (Note that while the tax rate remains constant, the taxes paid will change.) What level of sales would generate $2,100,000 in net income?