Problem 3-15 INCOME STATEMENT

Edmonds Industries is forecasting the following income statement:

Sales	$11,000,000
Operating costs excluding depreciation & amortization	6,050,000
EBITDA	$4,950,000
Depreciation and amortization	1,650,000
EBIT	$3,300,000
Interest	660,000
EBT	$2,640,000
Taxes (40%)	1,056,000
Net income	$1,584,000

The CEO would like to see higher sales and a forecasted net income of $2,455,200. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 5%. The tax rate, which is 40%, will remain the same. (Note that while the tax rate remains constant, the taxes paid will change.) What level of sales would generate $2,455,200 in net income? If necessary, round your answer to the nearest dollar at the end of the calculations. $