Microsoft Corporation is preparing its budget for the upcoming fiscal year. The following information is provided:
•Expected sales: $4,000,000
•Cost of Goods Sold: $2,400,000
•Operating Expenses: $1,000,000
•Interest Expense: $70,000
•Tax Rate: 25%
Required:
1.Prepare a budgeted income statement.
2.Calculate the expected net income.
3.Discuss the role of budgeting in Microsoft's strategic planning.