Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem: Swann Systems has forecast this income statement for the upcoming year:

Sales

$5,000,000

Operating costs (excluding depr and amort)

3,000,000

EBITDA

$2,000,000

Depreciation and amortization

500,000

EBIT

$1,500,000

Interest

500,000

EBT

$1,000,000

Taxes (40%)

400,000

Net income

$600,000

The company's president is unsatisfied with the forecast and wants to see higher sales and a forecasted net income of $2,000,000.

Suppose that operating costs are always sixty percent of sales, & that depreciation and amortization, interest expense, and the company's tax rate [40 percent], will remain the same even if sales change.  How much in sales would Swann have to obtain to generate $2,000,000 in net income?

[A]      $ 5,800,000

[B]      $ 6,000,000

[C]      $ 7,200,000

[D]      $ 8,300,000

[E]      $10,833,333

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M916163

Have any Question? 


Related Questions in Basic Finance

1 why do adjustable rate mortgages arms seem to be a more

1. Why do adjustable rate mortgages (ARMs) seem to be a more suitable alternative for mortgage lending than PLAMs? 2. List each of the main terms likely to be negotiated in an ARM. What does pricing an ARM using these te ...

Suppose that the dow jones industrial average is above the

Suppose that the Dow Jones Industrial Average is above the 10,000 level. If the Dow were to fall to 6,000, who would gain the most: investors who had bought call options, investors who had sold call options, investors wh ...

You buy a stock for 35 per share one year later you receive

You buy a stock for $35 per share. One year later you receive a dividend of $3.50 per share and sell the stock for $30 per share. What is your total rate of return on this investment? What is your capital gain or loss yi ...

What type of constraints may a client impose on a portfolio

What type of constraints may a client impose on a portfolio manager? If an investment in stock has a value of $3,000 at the beginning of the year and $3,500 at the end of the year, and paid a dividend of $250 at the end ...

What are current assets if a market is price efficienta

What are current assets? If a market is price efficient, a. Can an investor "beat the market"? b. Which type of portfolio management-active or passive-is best? What does the financing decision of a firm involve? List the ...

Apple inc is building a branch in vietnam the cost is 6

Apple Inc. is building a branch in Vietnam. The cost is 6 million VND. The company expects the VND cash flows for the next four years are 3 million VND, 5 million VND, 3 million VND, and 4 million VND, respectively. The ...

Explain why end users who conduct their risk management

Explain why end users, who conduct their risk management operations in the treasury department, should not require the treasury department to be a profit center ? Distinguish the typical objectives of a dealer engaging i ...

Explain how an organization determines whether a hedge is

Explain how an organization determines whether a hedge is sufficiently effective to justify hedge accounting? Describe the primary differences between accounting for fair value hedges and accounting for cash flow hedges? ...

Given xyzs assets are currently worth 17b and that the risk

Given: XYZ's assets are currently worth $1.7B and that the risk free rate is 10% P/A [annual compounding; a year from now, the value of XYZ assets will be either be worth $2.2 B or $1.6 B. XYZ issued some time ago a zero ...

Cost estimation and budgetingan important aspect of cost

Cost Estimation and Budgeting An important aspect of cost budgeting is personnel. A current professional issue in the engineering field is companies using contract engineers like employees but refusing to actually make t ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro