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 $17.800 Less: Cost of goods sold 8.100 Gross profits $ 9.700 Less: Other operating expenses 3.700 Earnings before interest, taxes, depreciation, and amortization (EBITDA) $ 6.000 Less: Depreciation 2.900 Earnings before interest and taxes (EBIT) $ 3.100 Less: Interest 0.795 Earnings before taxes (EBT) $ 2.305 Less: Taxes 0.484 Net income $ 1.821 The CEO of Tom and Sue's wants the company to earn a net income of $2.750 million in 2022. Cost of goods sold is expected to be 50 percent of net sales, depreciation and other operating expenses are not expected to change, interest expense is expected to increase to $1.261 million, and the firm's tax rate will be 21 percent. Calculate the net sales needed to produce net income of $2.750 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

Step: 3

blur-text-image

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

Finance And Financial Markets

Authors: Keith Pilbeam

4th Edition

1137515627, 978-1137515629

More Books

Students also viewed these Finance questions

Question

Name the different levels of the hierarchy of needs. (p. 264)

Answered: 1 week ago