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Edmonds Industries is forecasting the following income statement: Sales $6,000,000 Operating costs excluding depreciation & amortization 3,300,000 EBITDA $2,700,000 Depreciation and amortization 420,000 EBIT $2,280,000
Edmonds Industries is forecasting the following income statement: Sales $6,000,000 Operating costs excluding depreciation & amortization 3,300,000 EBITDA $2,700,000 Depreciation and amortization 420,000 EBIT $2,280,000 Interest 540,000 EBT $1,740,000 Taxes (40%) 696,000 Net income $1,044,000 The CEO would like to see higher sales and a forecasted net income of $2,035,800. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 11%. 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 $2,035,800 in net income? Round your answer to the nearest dollar, if necessary
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