Question
The following is the 2013 income statement for Lamps, Inc. in millions of dollars net sales 100 less: cost of good sold 80 gross profits
The following is the 2013 income statement for Lamps, Inc.
in millions of dollars net sales 100
less: cost of good sold 80
gross profits 20
less: depreciation 5
EBIT 15
less: interest 2
EBT 13
less: taxes 5
net income 8
The CEO of Lamps wants the company to earn a net income of $12 million in 2014. Cost of goods sold is expected to be 75 percent of net sales, depreciation expense is not expected to change, interest expense is expected to increase to $4 million, and the firm's tax rate will be 40 percent. What is the net sales needed to produce net income of $12 million? explain by steps.
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