Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Quantitative Problem: At the end of last year, Edwin Inc. reported the following income statement in millions of dollars): Sales $4,160.00 Operating costs (excluding depreciation)

image text in transcribed
image text in transcribed
Quantitative Problem: At the end of last year, Edwin Inc. reported the following income statement in millions of dollars): Sales $4,160.00 Operating costs (excluding depreciation) 3,013.00 EBITDA $1,147.00 Depreciation 330.00 EBIT $817.00 Interest 150.00 EBT $667.00 Taxes (40%) 266.80 Net Income $400.20 Looking ahead to the following year, the company's CFO has assembled this information: Year-end sales are expected to be 5% higher than $4.16 billion in sales generated last year. Year-end operating costs, excluding depreciation, are expected to increase at the same rates as sales. Depreciation costs are expected to increase at the same rate as sales. Interest costs are expected to remain unchanged. The tax rate is expected to remain at 40%. On the basis of this information, what will be the forecast for Edwin's year-end net income? Enter your answers as positive values. Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answers to two decimal places. Edwin Inc. Income Statement (in millions of dollars) Sales $ 4368 Operating costs (excluding depreciation) 3184.6 EBITDA tA $ 1183.4 Depreciation 346.50 EBIT $ tA 836.9 Interest 150.00 EBT $ 691.00 X Taxes (40%) 266.8 Net income $ 400.20

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 Society And Sustainability

Authors: Nick Silver

1st Edition

1137560606, 978-1137560605

More Books

Students also viewed these Finance questions