Edmonds Industries is forecasting the following income statement: Sales Operating costs excluding depreciation & amortization EBITDA...

 

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Edmonds Industries is forecasting the following income statement: Sales Operating costs excluding depreciation & amortization EBITDA Depreciation and amortization $6,000,000 3,300,000 $2,700,000 360,000 $2,340,000 300,000 EBT $2,040,000 Taxes (25%) 510,000 $1,530,000 Net income The CEO would like to see higher sales and a forecasted net income of $2,880,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 9%. 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 $2,880,000 in net income? Round your answer to the nearest dollar, if necessary. EBIT Interest $ 69 Edmonds Industries is forecasting the following income statement: Sales Operating costs excluding depreciation & amortization EBITDA Depreciation and amortization $6,000,000 3,300,000 $2,700,000 360,000 $2,340,000 300,000 EBT $2,040,000 Taxes (25%) 510,000 $1,530,000 Net income The CEO would like to see higher sales and a forecasted net income of $2,880,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 9%. 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 $2,880,000 in net income? Round your answer to the nearest dollar, if necessary. EBIT Interest $ 69

Answer rating: 100% (QA)

To calculate the level of sales that would generate a net income of 2880000 we need to work backward ... View the full answer