Develops-market productivity software for municipal govermet

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Reference no: EM131529685

MasterTech is a new software company that develops and markets productivity software for municipal government applications. In developing their income statement, the following formulas are used:

gross profit = net sales - cost of sales

net operating profit = gross profit - administrative expenses - selling expenses

net income before taxes = net operating profit - interest expense

net income = net income before taxes - taxes

Net sales are expected to be $1,250,000. Cost of sales is estimated to be $300,000. Selling expenses have a fixed component that is estimated to be $90,000 and a variable component that is estimated to be 8% of net sales. Administrative expenses are $50,000. Interest expenses are $8,000. The company is taxed at a 50% rate.

Develop a spreadsheet model to calculate the net income. Design your spreadsheet using good spreadsheet-engineering principles.

Reference no: EM131529685

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