Edmonds Industries is forecasting the following income statement:SalesOperating costs excluding depreciation & amortizationEBITDA$12,000,0006,600,000$5,400,0001,680,000EBIT$3,720,000Interest1,200,000.EBT$2,520,000Taxes (25%)630,000Net income$1,890,000The CEO would like to see higher sales and a forecasted net income of $2,550,000. Assumethat operating costs (excluding depreciation and amortization) are 55% of sales and thatdepreciation and amortization and interest expenses will increase by 15%. The tax rate, whichis 25%, will remain the same. (Note that while the tax rate remains constant, the taxes paidwill change.) What level of sales would generate $2,550,000 in net income? Round your answerto the nearest dollar, if necessary.Depreciation and amortization

Variable costs are costs which changes along with change in activity level. Variable cost ratio is…

Answered: Edmonds Industries is forecasting the…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Edmonds Industries is forecasting the following income statement: Sales Operating costs excluding depreciation & amortization EBITDA Depreciation and amortization $10,000,000 5,500,000 $4,500,000 1,400,000 EBIT $3,100,000 Interest 600,000 EBT $2,500,000 Taxes (25%) 625,000 $1,875,000 Net income. The CEO would like to see higher sales and a forecasted net income of $2,660,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 12%. The tax rate, which is 25%, will remain the same. (Note that while the tax- rate remains constant, the taxes paid will change.) What level of sales would generate $2,660,000 in net income? Round your answer to the nearest dollar, if necessary. Grade it Now Save & Continue
Edmonds Industries is forecasting the following income statement: Sales Operating costs excluding depreciation & amortization EBITDA Depreciation and amortization EBIT Interest EBT Taxes (25%) Net income $11,000,000 6,050,000 $4,950,000 660,000 $4,290,000 880,000 $3,410,000 852,500 $2,557,500 The 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. (Note that 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. $
Edmonds Industries is forecasting the following income statement: Sales $10,000,000 Operating costs excluding depreciation & amortization 5,500,000 EBITDA $4,500,000 Depreciation and amortization 900,000 EBIT $3,600,000 Interest 1,000,000 EBT $2,600,000 Taxes (40%) 1,040,000 Net income $1,560,000 The CEO would like to see higher sales and a forecasted net income of $2,496,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 14%. 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 $2,496,000 in net income? If necessary, round your answer to the nearest dollar at the end of the calculations. $
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 660,000 EBIT $4,290,000 Interest 660,000 EBT $3,630,000 Taxes (40%) 1,452,000 Net income $2,178,000 The CEO would like to see higher sales and a forecasted net income of $3,312,000. 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 40%, will remain the same. (Note that while the tax rate remains constant, the taxes paid will change.) What level of sales would generate $3,312,000 in net income? (If necessary, round your answer to the nearest dollar at the end of the calculations.) The income statement is a company's financial statement that shows the firm's operating revenue and cost. It is used to present the operating…
Edmonds Industries is forecasting the following income statement: Sales $10,000,000 Operating costs excluding depreciation and amortization 5,500,000 EBITDA $ 4,500,000 Depreciation and amortization 1,200,000 EBIT $ 3,300,000 Interest 500,000 $ 2,800,000 EBT Taxes (40%) 1,120,000 Net income $ 1,680,000 The CEO would like to see higher sales and a forecasted net income of $2,100,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 6%. 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 $2,100,000 in net income?
INCOME STATEMENT XYZ Industries is forecasting the following income statement: Sales P8,000,000 Operating costs excl. depr. & amort. 4,400,000 EBITDA 3,600,000 Depreciation & 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 net income of 2,500,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 10%. The tax rate, which is 40%, will remain the same. What level of sales would generate 2,500,000 in net income? *
5 Edmonds Industries is forecasting the following income statement: Sales Operating costs (excl. Depr. & Amort.) EBITDA Depreciation EBIT Interest EBT Taxes (40%) Net income $10,000,000 5,500,000 4,500,000 1,200,000 $ 3,300,000 500,000 $ 2,800,000 1,120,000 $ 1,680,000 The CEO would like to see higher sales and a forecasted net income of $2,100,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 6%. 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 $2,100,000 in net income?
Below is given the data for the assembly division of Charles Corporation: Sales Cost of Sales Operating Expenses $10,000,000 $15,000,000 Average Operating Assets $250,000,000 $310,000,000 2020 2021 $100,000,000 $165,000,000 $22,000,000 $28,000,000 Minimum Required Rate of Return Actual Cost of Capital Income Tax Rate Instructions 1. Compute the margin and turnover ratios for each year 2. Compute the ROI for each year 3. Compute the residual income for each year 4. Compute EVA for Charles Corporation for each year (Note: Round to 2 decimal) MacBook Air 9% 6% 30%
Coolidge Cola is forecasting the following income statement: Sales 30,000,000Operating costs excluding depreciation and amortization (20,000,000)EBITDA 10,000,000Depreciation and amortization (5,000,000)Operating income (EBIT) 5,000,000Interest expense (2,000,000)Taxable income (EBT) 3,000,000Taxes (40%) (1,200,000)Net income 1,800,000 Assume that, with the exception of depreciation, all other non-cash revenues and expenses…
The following selected data for BC Company for 2022: Sales P 2,000,000Variable Costs 1,200,000Traceable Fixed Costs 200,000Average Invested Capital 400,000Capital Charge 15% 1. The residual income amounted to? 2. Assuming the same information in the previous item, the return on investment percentage is?
Given the following information:SalesFixed ExpensesVariable Expensess5,0002,0001,750What would expected operating profit be if the company experienced a 10% increase in fixedcosts and a 100/0 increase m sales volume? a) $1,375. b) $1,550. c) $1,250. d) $1,750.
Based on the pro - forma income statement, please estimate OCF and complete the tables. Sales 125,000 Variable costs -29, 000 Fixed costs -30,000 Depreciation -12,800 EBIT 53, 200 Tax -18, 620 NI 34, 580 Enter your final answers as whole numbers without using 1000 separators. Use a " -" sign for cash costs, expenses, cash outflows. (1) Starting from EBIT EBIT + Depreciation - Tax OCF? = OCF What is EBIT? What is Depreciation? What is Tax? What is

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