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What level of sales would generate a net income

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Question - Use AstroTurf Company's income statement below to answer the following questions.

Operating costs (excl. depreciations & amortization): $4.5m

Depreciation and amortization: $1.5m

Interest: $0.7m

Net Income: $2.8m

Tax Rate: 35%

Required -

1. Calculate AstroTurf's EBITDA.

2. What level of sales would generate a net income of $4.2m for the following year, knowing that operating costs (excl. depreciation and amortization) will increase by 7.5%, and given a 35% tax rate?

Reference no: EM132535649

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