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    idrisy Posts: 2, Reputation: 1
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    Sep 22, 2012, 12:30 PM
    What level of sales would generate $2,633,400 in net income?
    Income Statement

    Hermann 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 1,540,000
    EBIT $3,410,000
    Interest 1,100,000
    EBT $2,310,000
    Taxes (40%) 924,000
    Net income $1,386,000

    The CEO would like to see higher sales and a forecasted net income of $2,633,400. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 7%. The tax rate, which is 40%, will remain the same. What level of sales would generate $2,633,400 in net income? If necessary, round your answer to the nearest dollar at the end of the calculations.

    Can someone please help me with this problem I would really appreciate it. Thank You

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