Answered step by step
Verified Expert Solution
Question
1 Approved Answer
UU Edmonds Industries is forecasting the following income statement: Sales $4,000,000 Operating costs excluding depreciation & amortization 2,200,000 EBITDA $1,800,000 Depredation and amortization 200,000 EBIT
UU Edmonds Industries is forecasting the following income statement: Sales $4,000,000 Operating costs excluding depreciation & amortization 2,200,000 EBITDA $1,800,000 Depredation and amortization 200,000 EBIT $1,600,000 Interest 240,000 EBT $1,360,000 Taxes (40%) 544,000 Net income $816,000 The CEO would like to see higher sales and a forecasted net income of $1,632,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 10%. 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 $1,632,000 in net income? Round your answer to the nearest dollar, if necessary. $ Activate Windows Go to Settings to activate
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started