the following income statement (in millions of dollars): Sales $4,250.00 Operating costs excluding depreciation 3,083.00 EBITDA $1,167.00 Depreciation 300.00 EBIT $867.00 Interest 170.00 EBT $697.00 Taxes (40%) 278.80 Net income $418.20
The AFN equation provides useful insights into the
Quantitative Problem: At the end of last year, Edwin Inc. reported the following income statement (in millions of dollars):
| Sales | $4,250.00 |
| Operating costs excluding |
3,083.00 |
| EBITDA | $1,167.00 |
| Depreciation | 300.00 |
| EBIT | $867.00 |
| Interest | 170.00 |
| EBT | $697.00 |
| Taxes (40%) | 278.80 |
| Net income | $418.20 |
Looking ahead to the following year, the company's CFO has assembled this information:
- Year-end sales are expected to be 6% higher than $4.25 billion in sales generated last year.
- Year-end operating costs, excluding depreciation, will equal 60% of sales.
- Depreciation costs are expected to increase at the same rate as sales.
- Interest costs are expected to remain unchanged.
- The tax rate is expected to remain at 40%.
On the basis of this information, what will be the forecast for Edwin's year-end net income? Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Enter all values as positive numbers. Do not round intermediate calculations. Round your answers to two decimal places.
| (in millions of dollars) | |
| Sales | $ |
| Operating costs excluding depreciation | |
| EBITDA | $ |
| Depreciation | |
| EBIT | $ |
| Interest | |
| EBT | $ |
| Taxes | |
| Net income | $ |
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