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

When the adjustable mirror on the michelson interferometer

When the adjustable mirror on the Michelson Interferometer is moved 20 wavelengths, how many fringe pattern shifts would be counted?

The following excerpts are taken from dividend policy

The following excerpts are taken from "Dividend Policy Determinants: An Investigation of the Influences of Stakeholder Theory" by Mark E. Holder, Frederick W. Langrehr, and J. Lawrence Hexter, published in the Autumn 199 ...

A newly issued 10 year bond is valued at par on june 1 2017

A newly issued 10 year bond is valued at par on June 1, 2017. The bond has an annual coupon of 8.0 percent. On June 1 2020, the bond has a yield to maturity of 7.1 percent. The first coupon is invested at 8.0 percent and ...

Part 11 prospective analysisforecast future financial

Part 1 1. Prospective Analysis Forecast future financial performance. Use the four valuation models outlined in class to produce an estimate of firm value, and compare to stock price. Perform sensitivity analysis and dis ...

1 what is the difference between global remuneration and

1. What is the difference between global remuneration and international assignment compensation? 2. What are the major issues related to the effectiveness of global remuneration plans? 3. How are equity compensation plan ...

How is the dupont system useful in analyzing a firms roa

How is the DuPont system useful in analyzing a firm's ROA and ROE? What information can be inferred from the decomposition of ROE into contributing ratios? What is the mathematical relationship between each of the indivi ...

Get rich quick a funds management company is considering an

Get Rich Quick, a funds management company, is considering an investment in a new pharmaceutical company. The company will be unable to pay a dividend until the end of Year 6. If a new product is successfully developed f ...

1 what are transition economies what are some of the

1. What are transition economies? What are some of the important changes occurring in transition economies? 2. Discuss some of the major legal systems that exist around the world. What are some of the most important diff ...

1 discuss how the interrupted time series design with a

1. Discuss how the interrupted time series design with a reversal and the interrupted time series design with multiple replications improve on the simple interrupted time series design. 2. Distinguish between a longitudi ...

The unemployment rate in a city is 12 if 9 people from the

The unemployment rate in a city is 12%. If 9 people from the city are sampled at random, find the probability that fewer than 2 of them are unemployed. Carry your intermediate computations to at least four decimal places ...

  • 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