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Income Statement Hermann Industries is forecasting the following incomestatement: Sales

Income Statement Hermann Industries is forecasting the following incomestatement: Sales

Income Statement

Hermann Industries is forecasting the following incomestatement:

Sales

$8,000,000

Operating costs excludingdepreciation & amortization

4,400,000

EBITDA

$3,600,000

Depreciation and amortization

800,000

EBIT

$2,800,000

Interest

480,000

EBT

$2,320,000

Taxes (40%)

928,000

Net income

$1,392,000

The CEO would like to see higher sales and a forecasted netincome of $2,714,400. Assume that operating costs (excludingdepreciation and amortization) are 55% of sales and thatdepreciation and amortization and interest expenses will increaseby 13%. The tax rate, which is 40%, will remain the same. Whatlevel of sales would generate $2,714,400 in net income? Ifnecessary, round your answer to the nearest dollar at the end ofthe calculations.

Abhinav 04-Dec-2019

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