Can someone show me the work for this problem?

3.14 Hermann Industries is forecasting the following income statement: Sales $8,000,000 Operating costs excluding depreciation & amortization 4,400,000 EBITDA $3,600,000 Depreciation and 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

a

mortization and interest expenses will increase by 10%. 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 $2,500,000 in net income?

Answer

:

Sale

s = $12,681,482