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The ceo would like to see higher sales and a forecasted net

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Reference no: EM13600482

Hermann Industries is forecasting the following income statement:

  • Sales $5,000,000
  • Operating costs excluding depreciation & amortization 2,750,000
  • EBITDA $2,250,000
  • Depreciation and amortization 600,000
  • EBIT $1,650,000
  • Interest 500,000
  • EBT $1,150,000
  • Taxes (40%) 460,000
  • Net income $690,000

The CEO would like to see higher sales and a forecasted net income of $1,380,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 11%. The tax rate, which is 40%, will remain the same. What level of sales would generate $1,380,000 in net income?

Reference no: EM13600482

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