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Q1) At the end of last year, Roberts Inc. reported following income statement (in millions of dollars):

Sales $3,000
Operating costs excluding depreciation 2,450
Depreciation 250
EBIT $300
Interest 125
EBT $175
Taxes (40 %) 70
Net Income $105

Looking ahead to following year, company's CFO has assembled following information:

Year-End sales are expected to be 10 percent higher than $3billion in sales generated last year.

Year-end operating costs, excluding depreciation, are expected to equal 80 % of year-end sales.

Depreciation is expected to increase at same rate as sales.

Interest costs are expected to remain unchanged.

Tax rate is expected to remain at 40 %.

On basis of this information, determine the forecast for Roberts' year-end net income?

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  • Category:- Accounting Basics
  • Reference No.:- M921463

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