Edmonds Industries is forecasting the following income statement:SalesOperating costs excluding depreciation & amortizationEBITDADepreciation and amortizationEBITInterestEBTTaxes (25%)Net income$11,000,0006,050,000$4,950,000660,000$4,290,000880,000$3,410,000852,500$2,557,500The CEO would like to see higher sales and a forecasted net income of $4,880,000. 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 25%, will remain the same. (Notethat while the tax rate remains constant, the taxes paid will change.) What level of sales would generate $4,880,000 in net income? Round your answer to the nearest dollar, if necessary.$

The income statement is a company's financial statement that shows the firm's operating revenue and…

Answered: Edmonds Industries is forecasting the…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section: Chapter Questions

Problem 2P

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