Hermann industries is forecasting the following income

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Hermann Industries is forecasting the following income statement: Sales $10,000,000 Operating costs excluding depreciation & amortization $5,500,000 EBITDA $4,500,000 Depreciation and amortization $1,300,000 EBIT $3,200,000 Interest $800,000 EBT $2,400,000 Taxes (40%) $960,000 Net income $1,440,000 The CEO would like to see higher sales and a forecasted net income of $2,808,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 8%. The tax rate, which is 40%, will remain the same. What level of sales would generate $2,808,000 in net income?

Reference no: EM13604095

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