eBook Problem Walk-Through Edmonds Industries is forecasting the following income statement: Sales Operating costs excluding depreciation & amortization EBITDA Depreciation and amortization $11,000,000 6,050,000 $4,950,000 1,320,000 $3,630,000 EBIT Interest EBT Taxes (25%) Net income 550,000 $3,080,000 770,000 $2,310,000 The CEO would like to see higher sales and a forecasted net income of $4,410,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 11%. The tax rate, which is 25%, will remain the same. (Note that while the tax rate remains constant, the taxes paid will change.) What level of sales would generate $4,410,000 in net income? Round your answer to the nearest dollar, if necessary. $
eBook Problem Walk-Through Edmonds Industries is forecasting the following income statement: Sales Operating costs excluding depreciation & amortization EBITDA Depreciation and amortization $11,000,000 6,050,000 $4,950,000 1,320,000 $3,630,000 EBIT Interest EBT Taxes (25%) Net income 550,000 $3,080,000 770,000 $2,310,000 The CEO would like to see higher sales and a forecasted net income of $4,410,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 11%. The tax rate, which is 25%, will remain the same. (Note that while the tax rate remains constant, the taxes paid will change.) What level of sales would generate $4,410,000 in net income? Round your answer to the nearest dollar, if necessary. $
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Problem Walk-Through
Edmonds Industries is forecasting the following income statement:
Sales
Operating costs excluding depreciation & amortization
EBITDA
Depreciation and amortization
$11,000,000
6,050,000
$4,950,000
1,320,000
$3,630,000
EBIT
Interest
EBT
Taxes (25%)
Net income
550,000
$3,080,000
770,000
$2,310,000
The CEO would like to see higher sales and a forecasted net income of $4,410,000. Assume that operating costs (excluding depreciation and amortization) are
55% of sales and that depreciation and amortization and interest expenses will increase by 11%. The tax rate, which is 25%, will remain the same. (Note that
while the tax rate remains constant, the taxes paid will change.) What level of sales would generate $4,410,000 in net income? Round your answer to the
nearest dollar, if necessary.
$
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