Use AstroTurf Company's income statement below to answer the following two questions. Answer these questions with a clear explanation, showing any steps or processes used to reach the answer. Explain your process as though you are teaching the concept to a student who isn't familiar with accounting. Operating costs (excl. depreciations & amortization): $4.5m Depreciation and amortization: $1.5m Interest: $0.7m Net Income: $2.8m Tax Rate: 35% 1. Calculate AstroTurfs EBITDA.

2. What level of sales would generate a net income of $4.2m for the following year, knowing that operating costs (excl. depreciation and amortization) will increase by 7.5%, and given a 35% tax rate.