Calculating Projected NetIncome. A proposed newinvestment has projected salesof $585,000. Variable costs are44 percent of sales, and fixedcosts are $187,000; depreciationis $51,000. Prepare a pro formaincome statement assuming taxrate of 21 percent. What is theprojected net income?

To prepare a pro forma income statement, we need to calculate various components based on the given…

Answered: Calculating Projected Net Income. A…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 1CMA

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Calculating Projected Net Income. A proposed new investment has projected sales of $585,000. Variable costs are 44 percent of sales, and fixed costs are $187,000; depreciation is $51,000. Prepare a pro forma income statement assuming tax rate of 21 percent. What is the projected net income?