Edmonds Industries is forecasting the following income statement:SalesOperating costs excluding depreciation & amortizationEBITDADepreciation and amortizationEBITInterest$6,000,0003,300,000$2,700,000300,000$2,400,000480,000EBT$1,920,000Taxes (25%)480,000$1,440,000Net IncomeThe CEO would like to see higher sales and a forecasted net income of $2,720,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and thatdepreciation 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 taxespaid will change.) What level of sales would generate $2,720,000 in net income? Round your answer to the nearest dollar, if necessary.$

Variable costs are costs which change along with the change in activity level. Variable cost is…

Answered: Edmonds Industries is forecasting the…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section: Chapter Questions

Problem 2P

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Edmonds Industries is forecasting the following income statement: Sales Operating costs excluding depreciation & amortization EBITDA Depreciation and amortization EBIT Interest EBT Taxes (25%) Net income $11,000,000 6,050,000 $4,950,000 660,000 $4,290,000 880,000 $3,410,000 852,500 $2,557,500 The CEO would like to see higher sales and a forecasted net income of $4,880,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 8%. 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 $4,880,000 in net income? Round your answer to the nearest dollar, if necessary. $
INCOME STATEMENT XYZ Industries is forecasting the following income statement: Sales P8,000,000 Operating costs excl. depr. & amort. 4,400,000 EBITDA 3,600,000 Depreciation & amortization 800,000 EBIT 2,800,000 Interest 600,000 EBT 2,200,000 Taxes (40%) 880,000 Net income 1,320,000 The CEO would like to see higher sales and a forecasted net income of 2,500,000. 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. What level of sales would generate 2,500,000 in net income? *
Hermann industries is forecasting the following income statement
5 Edmonds Industries is forecasting the following income statement: Sales Operating costs (excl. Depr. & Amort.) EBITDA Depreciation EBIT Interest EBT Taxes (40%) Net income $10,000,000 5,500,000 4,500,000 1,200,000 $ 3,300,000 500,000 $ 2,800,000 1,120,000 $ 1,680,000 The CEO would like to see higher sales and a forecasted net income of $2,100,000. 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 40%, will remain the same. (Note that while the tax rate remains constant, the taxes paid will change.) What level of sales would generate $2,100,000 in net income?
Coolidge Cola is forecasting the following income statement: Sales 30,000,000Operating costs excluding depreciation and amortization (20,000,000)EBITDA 10,000,000Depreciation and amortization (5,000,000)Operating income (EBIT) 5,000,000Interest expense (2,000,000)Taxable income (EBT) 3,000,000Taxes (40%) (1,200,000)Net income 1,800,000 Assume that, with the exception of depreciation, all other non-cash revenues and expenses…
Below is given the data for the assembly division of Charles Corporation: Sales Cost of Sales Operating Expenses $10,000,000 $15,000,000 Average Operating Assets $250,000,000 $310,000,000 2020 2021 $100,000,000 $165,000,000 $22,000,000 $28,000,000 Minimum Required Rate of Return Actual Cost of Capital Income Tax Rate Instructions 1. Compute the margin and turnover ratios for each year 2. Compute the ROI for each year 3. Compute the residual income for each year 4. Compute EVA for Charles Corporation for each year (Note: Round to 2 decimal) MacBook Air 9% 6% 30%
What is the Residual Income for Stevenson Corporation, given the following info: Invested Assets = $550,000 Sales = $660,000 Income from Operations = $99,000 Desired minimum rate of return = 15.0% O $16,500 O $17,280 O $14,850 O $0
please answer and show computation
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Calculate the sales margin, asset turnover, and ROA for the companies below: Average Capital Assets Company A B Net Income Sales 350,000 5,500,000 12,000,000 .06 845,000 9,350,000 13,500,000 Sales Margin 1 Asset Turnover 2.9 1.44 Note: Please write the sales Margin and ROI as a percentage or as a decimal rounded to two places behind the decimal point. ROI 6,500,000 4,150,000
The following are selected data for the division for the consumer products of ABC Corp for 2020: Sales P 10,000,000 Average invested capital 4,000,000 Net Income 400,000 Cost of Capital 8% What is the asset turn-over ratio for the division? 1. .25 times 2. 2.5 times 3. 8 times 4. 10% O 1 O 2 O 3 O 4
IF XZX has the following data:Profit margin 2%Return on Asset 4%Sales revenues $500,000What is the company Total assets ? O a. $500,000 O b. $300,000 O c. $250,000 O d. $100,000

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