Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Listed below is the 2021 income statement for Tom and Sue Travels, Inc. TOM AND SUE TRAVELS, INC. Income Statement for Year Ending December 31,

image text in transcribed

Listed below is the 2021 income statement for Tom and Sue Travels, Inc. TOM AND SUE TRAVELS, INC. Income Statement for Year Ending December 31, 2021 (in millions of dollars) Net sales $17.600 Less: Cost of goods sold 8.000 Gross profits $ 9.600 Less: Other operating expenses 3.650 Earnings before interest, taxes, depreciation, and amortization (EBITDA) $ 5.950 Less: Depreciation 2.800 Earnings before interest and taxes (EBIT) $ 3.150 Less: Interest 0.790 Earnings before taxes (EBT) $ 2.360 Less: Taxes Net income $ 1.864 0.496 The CEO of Tom and Sue's wants the company to earn a net income of $2.700 million in 2022. Cost of goods sold is expected to be 60 percent of net sales, depreciation and other operating expenses are not expected to change, interest expense is expected to increase to $1.256 million, and the firm's tax rate will be 21 percent. Calculate the net sales needed to produce net income of $2.700 million. (Enter your answer in millions of dollars rounded to 3 decimal places.) Net sales million

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Alexander Hamilton On Finance Credit And Debt

Authors: Richard Sylla

1st Edition

0231174012, 978-0231184571

More Books

Students also viewed these Finance questions

Question

3. Describe key elements that infl uence budget preparation.

Answered: 1 week ago

Question

What is the principle of thermodynamics? Explain with examples

Answered: 1 week ago