What level of sales would generate

Assignment Help Finance Basics
Reference no: EM13324080

Hermann Industries is forecasting the following income statement:

Sales                                                                  $8,000,000
operating costs excluding depreciationand amortization                                                  $4,400,000
EBITDA                                                            $3,600,000
Depreciation and 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(excluding depreciation andamortization) are 55 percent of sales, and depreciation andamortization and interest expenses will increase by 10 percent. Thetax rate, which is 40 percent, will remain the same. What level ofsales would generate $2,500,000 in net income?

Reference no: EM13324080

Questions Cloud

How to write an applet that draws the house shown : How to write an applet that draws the house shown. When the user clicks on the STOP sign an audio of your choice plays.
Explain the dissolving of salt sometimes an exothermic : Why is the dissolving of salt sometimes an exothermic and sometimes an exothermic process
Submit a debt policy that offers financial leverage : Submit a debt policy that offers financial leverage for the board of directors of the retirement facility. Please support your assertions.
Determine the increase in vertical stress at 2m below ground : Three parallel line loads of 500kN/m are applied at ground level in a straight line 4.0m apart. Determine the increase in vertical stress at 2.0m below ground level beneath the middle load.
What level of sales would generate : Thetax rate, which is 40 percent, will remain the same. What level of sales would generate $2,500,000 in net income?
Compute heat flow and j and calculate the enthalpy change : Volume of water used, mL: 75.0ml Initial temperature of water: 23.4 degree celsius Mass of salt taken, g: 5g Moles of salt taken, mol: 0.0625mol Highest/lowest temperature,: 24.0/20.1 Calculate heat flow,J and calculate the Enthalpy change,KJ/mol:..
What is the period of the oscillations : A 66 kg solid sphere with a 14 cm radius is suspended by a vertical wire. What is the period of the oscillations
What is the probability of a water shortage in the city : during the next month, the amount of water available for a city is lognormally distributed with a mean of 1 million gallons and a c.o.v. of 40%, where as the total demand is expected to follow a lognormal distribution
What is the probability of a water shortage in the city : during the next month, the amount of water available for a city is lognormally distributed with a mean of 1 million gallons and a c.o.v. of 40%, where as the total demand is expected to follow a lognormal distribution

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd