Simeon Industries is forecasting the following income statement:
Sales
$17,000,000
Operating costs excluding
depreciation
11,050,000
EBITDA
$ 5,950,000
Depreciation
2,500,000
EBIT
$ 3,450,000
Interest
1,500,000
EBT
$ 1,950,000
Taxes (25%)
487,500
Net income
$ 1,462,500
The CEO would like to see higher sales and a forecasted net income of $2,000,000. Assume that operating costs (excluding depreciation) are 65% of sales and that depreciation and interest expenses will increase by 5%. The tax rate will remain at 25%. What level of sales would generate $2,000,000 in net income?