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Edmonds Industries is forecasting the following income statement: Sales $4,000,000 Operating costs excluding depreciation & amortization 2,200,000 EBITDA $1,800,000 Depreciation and amortization 400,000 EBIT $1,400,000
Edmonds Industries is forecasting the following income statement: Sales $4,000,000 Operating costs excluding depreciation & amortization 2,200,000 EBITDA $1,800,000 Depreciation and amortization 400,000 EBIT $1,400,000 Interest 200,000 EBT $1,200,000 Taxes (25%) 300,000 Net income $900,000 The CEO would like to see higher sales and a forecasted net income of $1,330,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 12%. 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 $1,330,000 in net income? Round your answer to the nearest dollar, if necessary
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