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Edmonds Industries is forecasting the following income statement: Sales Operating costs excluding depreciation & amortization EBITDA Depreciation and amortization EBIT Interest $4,000,000 2.200.000 $1,800,000 320,000 $1,480,000 360,000 EBT $1,120,000 Taxes (25%) 260,000 $840,000 Net income The CEO would like to see higher sales and a forecasted net income of $1.130,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 6%. 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 $1,130,000 in net income? Round your answer to the nearest dollar, if necessary.

Edmonds Industries is forecasting the following income statement: Sales Operating costs excluding depreciation & amortization EBITDA Depreciation and amortization EBIT Interest $4,000,000 2.200.000 $1,800,000 320,000 $1,480,000 360,000 EBT $1,120,000 Taxes (25%) 260,000 $840,000 Net income The CEO would like to see higher sales and a forecasted net income of $1.130,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 6%. 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 $1,130,000 in net income? Round your answer to the nearest dollar, if necessary.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Edmonds Industries is forecasting the following income statement: Sales Operating costs excluding depreciation & amortization EBITDA Depreciation and amortization EBIT Interest $4,000,000 2,200,000 $1,800,000 320,000 $1,480,000 360,000 $1,120,000 260,000 $840,000 EBT Taxes (25%) Net income The CEO would like to see higher sales and a forecasted net income of $1,130,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 6%. 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 $1,130,000 in net income? Round your answer to the nearest dollar, if necessary.
Transcribed Image Text:Edmonds Industries is forecasting the following income statement: Sales Operating costs excluding depreciation & amortization EBITDA Depreciation and amortization EBIT Interest $4,000,000 2,200,000 $1,800,000 320,000 $1,480,000 360,000 $1,120,000 260,000 $840,000 EBT Taxes (25%) Net income The CEO would like to see higher sales and a forecasted net income of $1,130,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 6%. 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 $1,130,000 in net income? Round your answer to the nearest dollar, if necessary.
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