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Income Statement Hermann 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 900,000
Income Statement
Hermann 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 | 900,000 |
EBIT | $1,800,000 |
Interest | 540,000 |
EBT | $1,260,000 |
Taxes (40%) | 504,000 |
Net income | $756,000 |
The CEO would like to see higher sales and a forecasted net income of $1,323,000. 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 40%, will remain the same. What level of sales would generate $1,323,000 in net income? If necessary, round your answer to the nearest dollar at the end of the calculations.
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