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The ceo would like to see higher sales and a forecasted

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Reference no: EM13619469

Income Statement: Herman Industries isforecasting the following income statement:

  • Sales $8,000,000
  • Operating costs excluding depr. & amort. 4,400,00
  • EBITDA $3,600,000
  • Depreciation &amortization 800,000
  • EBIT $2,800,000
  • Interest 600,000
  • EBT $2,200,000
  • Taxes($40%) 880,000
  • Net income $1,320,000

The CEO would like to see higher sales and a forecasted netincome of $2,500,000. Assume that operating costs (excludingdepreciation and amortization) are 55% of sales and thatdepreciation and amortization and interest expenses will increaseby 10%. The tax rate, which is 40%, will remain thesame. What level of sales would generate $2,500,000 in netincome?

Reference no: EM13619469

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