You are preparing to discuss borrowing needs with your bank's loan officer who asks you to prepare pro-forma financial statements. Below are the financial statements for the year just ended. Your sales department is projecting a 31% increase in sales. Days sales outstanding are expected to improve to 45 days. With respect to inventory and accounts payable, assume that purchases will be $10,807,500 and cash payments will be $9,726,750. The Company expects to invest $1,701,000 (net of depreciation) to expand its storage capacity and achieve scale savings. Accordingly, gross profit margins are expected to be 25% in the future. Other expenses are expected to remain the same percentage of sales. The retention ratio is 53%.

For ease of calculation, assume interest expense remains the same.

Cash	400,000		Sales	10,000,000
Accounts Receivable	1,400,000		Cost of Sales	8,000,000
Inventory	1,800,000		Gross Profit	2,000,000
Total current Assets	3,600,000		Operating Expense	900,000
Fixed Assets	1,400,000		EBIT	1,100,000
Total Assets	5,000,000		Interest Exp	100,000
			EBT	1,000,000
Accounts Payable	1,200,000		Tax (30%)	300,000
Long-term Debt	1,000,000		Net Income	700,000
Total Debt	2,200,000
Common Stock	1,300,000
Retained earnings	1,500,000
Total Debt and Equity	5,000,000

Sales	13,100,000
Cost of Sales	9,825,000
Gross Profit	3,275,000
Operating Expenses
EBIT
Interest Expense
EBT
Tax (30%)
Net Income

In preparing your forecast financial statements, your forecast for Net Income will be _?