INCOME STATEMENT Edmonds Industries is forecasting the following income statement: Sales $10,000,000 Operating costs excluding depreciation and amortization 5,500.000 EBITDA 5 4.500,000 Depreciation and amortization 1,200,000 EBIT $ 3.300,000 Interest so0,000 $ 2.800,000 1,120.000 $ 1.680.000 EBT Taxes (40 Net income 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?
INCOME STATEMENT Edmonds Industries is forecasting the following income statement: Sales $10,000,000 Operating costs excluding depreciation and amortization 5,500.000 EBITDA 5 4.500,000 Depreciation and amortization 1,200,000 EBIT $ 3.300,000 Interest so0,000 $ 2.800,000 1,120.000 $ 1.680.000 EBT Taxes (40 Net income 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?
Chapter14: Security Structures And Determining Enterprise Values
Section: Chapter Questions
Problem 8EP
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