Question
Edmonds Industries is forecasting the following income statement: Sales Operating costs excluding depreciation & amortization EBITDA Depreciation and amortization EBIT Interest EBT Taxes (25%)
Edmonds Industries is forecasting the following income statement: Sales Operating costs excluding depreciation & amortization EBITDA Depreciation and amortization EBIT Interest EBT Taxes (25%) Net income $4,000,000 2,200,000 $1,800,000 360,000 $1,440,000 400,000 $1,040,000 260,000 $780,000 The CEO would like to see higher sales and a forecasted net income of $1,150,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 10%. 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 $1,150,000 in net income? Round your answer to the nearest dollar, if necessary. $
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