Question: You are generating your pro forma income statement for next year. Sales are forecast to be $100,000. Variable operating expenses are expected to be 20%

You are generating your pro forma income statement for next year. Sales are forecast to be $100,000. Variable operating expenses are expected to be 20% of sales, and fixed operating expenses are expected to be $60,000. You forecast your debt to be $20,000 with a cost of debt of 8%. If you forecast the tax rate to be 30%, what is your forecast value for next year's earnings after taxes?

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