Question
INCOME STATEMENT 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 720,000
INCOME STATEMENT 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 720,000 EBIT $1,980,000 Interest 600,000 EBT $1,380,000 Taxes (40%) 552,000 Net income $828,000
The CEO would like to see higher sales and a forecasted net income of $993,600. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 13%. 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 $993,600 in net income? If necessary, round your answer to the nearest dollar at the end of the calculations.
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