Calculation of net income.
At the end of last year, Roberts Inc. reported the following income statement (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 the following year, the company's CFO has assembled the following information:
- Year-End sales are expected to be 10 percent higher than the $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 the same rate as sales.
- Interest costs are expected to remain unchanged.
- The tax rate is expected to remain at 40 %.
On the basis of this information, what will be the forecast for Roberts' year-end net income?