What level of sales would generate in net income

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Reference no: EM131964257

Edmonds Industries is forecasting the following income statement:

Sales $11,000,000

Operating costs excluding depreciation & amortization 6,050,000

EBITDA $4,950,000 Depreciation and amortization 1,430,000

EBIT $3,520,000

Interest 990,000

EBT $2,530,000

Taxes (40%) 1,012,000

Net income $1,518,000

The CEO would like to see higher sales and a forecasted net income of $2,504,700. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 9%. The tax rate, which is 40%, will remain the same. (Note that while the tax rate remains constant, the taxes paid will change.) What level of sales would generate $2,504,700 in net income? If necessary, round your answer to the nearest dollar at the end of the calculations.

Reference no: EM131964257

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