During its last financial auditing releases, Mowana Co. reported $363,780 of sales and $168,445 of operating costs
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Question:
The owner of "ABC Co" insisted that he wants to see a net income of $4,000,000, at least. He was informed that to do so, operating costs (excluding depreciation and amortization) should remain at 50 percent of sales. Also, depreciation and amortization, interest expense, and the company's tax rate, which is 40 percent, will remain the same even if sales change. The task that should be done is a better job in marketing the sale of the company's products. What level of sales would ABC Co have to obtain to generate $4,000,000 in net income? The owner was shocked with the most recent Net Income achieved by his company.
Related Book For
Fundamentals of Financial Management
ISBN: 978-1285867977
14th edition
Authors: Eugene F. Brigham, Joel F. Houston
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