Earnings before interest and taxes and net income increase

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Reference no: EM13924713

You have developed the following pro forma income statement for your corporation.(Sales 45764000) (variable costs 2285400) a. If sales should increase by 30 percent. by what percent would earnings before interest and taxes and net income increase? b. If sales should decrease by 30 percent, by what percent would earnings before interest and taxes and net income decrease? c. If the firm were to reduce its reliance on debt financing such that interest expense were cut in half( how would this affect your answers to parts a and b?

Revenue 22,910,000

Fixed costs (9,300,000)

EBIT 13610000

Interest expense (1298000)

Earning before taxes 12312000

Taxes 50% (6156000)

Net Income 6156000

Reference no: EM13924713

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