Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sales $11,000,000 Operating costs excluding depreciation & amortization 6,050,000 EBITDA $4,950,000 Depreciation and amortization 550,000 EBIT $4,400,000 Interest 1,100,000 EBT $3,300,000 Taxes (40%) 1,320,000 Net

Sales $11,000,000
Operating costs excluding depreciation & amortization 6,050,000
EBITDA $4,950,000
Depreciation and amortization 550,000
EBIT $4,400,000
Interest 1,100,000
EBT $3,300,000
Taxes (40%) 1,320,000
Net income $1,980,000

The CEO would like to see higher sales and a forecasted net income of $3,069,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 8%. 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 $3,069,000 in net income? Round your answer to the nearest dollar, if necessary.

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_2

Step: 3

blur-text-image_3

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

More Books

Students also viewed these Finance questions

Question

What are their roles relative to the COTS product?

Answered: 1 week ago