Question
Quantitative Problem: At the end of last year, Edwin Inc. reported the following income statement (in millions of dollars): Sales $4,290.00 Operating costs (excluding depreciation)
Quantitative Problem: At the end of last year, Edwin Inc. reported the following income statement (in millions of dollars):
| Sales | $4,290.00 |
| Operating costs (excluding depreciation) | 3,058.00 |
| EBITDA | $1,232.00 |
| Depreciation | 345.00 |
| EBIT | $887.00 |
| Interest | 130.00 |
| EBT | $757.00 |
| Taxes (40%) | 302.80 |
| Net income | $454.20 |
Looking ahead to the following year, the company's CFO has assembled this information:
- Year-end sales are expected to be 5% higher than $4.29 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 | $ |
| Operating costs (excluding depreciation) | |
| EBITDA | $ |
| Depreciation | |
| EBIT | $ |
| Interest | |
| EBT | $ |
| Taxes (40%) | |
| Net income | $ |
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, ? Joel F. Houston
11th edition
978-0324302691
