Problem 3-13 Income Statement

Hermann Industries is forecasting the following income statement:

Sales	$8,000,000
Operating costs excluding depreciation & amortization	4,400,000
EBITDA	$3,600,000
Depreciation and amortization	960,000
EBIT	$2,640,000
Interest	640,000
EBT	$2,000,000
Taxes (40%)	800,000
Net income	$1,200,000

The CEO would like to see higher sales and a forecasted net income of $2,220,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 9%. The tax rate, which is 40%, will remain the same. What level of sales would generate $2,220,000 in net income? If necessary, round your answer to the nearest dollar at the end of the calculations. Write out your answer completely. For example, 13 million should be entered as 13,000,000. $