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Sales $ 6 , 0 0 0 , 0 0 0 Operating costs excluding depreciation & amortization 3 , 3 0 0 , 0 0

Sales $6,000,000
Operating costs excluding depreciation & amortization 3,300,000
EBITDA $2,700,000
Depreciation and amortization 780,000
EBIT $1,920,000
Interest 480,000
EBT $1,440,000
Taxes (25%)360,000
Net income $1,080,000
The CEO would like to see higher sales and a forecasted net income of $1,970,000. 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 25%, will remain the same. (Note that while the tax rate remains constant, the taxes paid will change.) What level of sales would generate $1,970,000 in net income? Round your answer to the nearest dollar, if necessary.

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