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Q1) Pro forma income statement at the end of last year, Roberts Inc. Reported income statement given below (in millions of dollars):

Sales $3,000
Operating costs excluding depreciation 2,450
EBITDA $ 550
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:

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

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

3. Depreciation is expected to raise at the same rate as sales

4. Interest costs are expected to remain anmodified.

5. Tax rate is expected to remain at 40 percent.

On the basis of this information, determine predict for Robert's year-end net income?

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M920941

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