Question

Edmonds Industries is forecasting the following income statement: Sales $5,000,000 Operating costs excluding depreciation & amortization 2,750,000 EBITDA $2,250,000 Depreciation and amortization 300,000 EBIT $1,950,000 Interest 450,000 EBT $1,500,000 Taxes (25%) 375,000 Net income $1,125,000 The CEO would like to see higher sales and a forecasted net income of $1,900,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 14%. 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 $1,900,000 in net income? Round your answer to the nearest dollar, if necessary. $

          Edmonds Industries is forecasting the following income statement:
Sales
$5,000,000
Operating costs excluding depreciation & amortization
2,750,000
EBITDA
$2,250,000
Depreciation and amortization
300,000
EBIT
$1,950,000
Interest
450,000
EBT
$1,500,000
Taxes (25%)
375,000
Net income
$1,125,000
The CEO would like to see higher sales and a forecasted net income of $1,900,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest
expenses will increase by 14%. 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 $1,900,000 in net income? Round
your answer to the nearest dollar, if necessary.
$

Edmonds Industries is forecasting the following income statement:
Sales
5,000,000
Operating costs excluding depreciation amortization
2,750,000
EBITDA2,250,000
Depreciation and amortization
300,000
EBIT
1,950,000
Interest
450,000
EBT1,500,000
Taxes (25%)
375,000
Net income
1,125,000
The CEO would like to see higher sales and a forecasted net income of1,900,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest
expenses will increase by 14%. 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 $1,900,000 in net income? Round
your answer to the nearest dollar, if necessary.

Added by Anne B.

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