At the end of last year, Edwin Inc. reported the following income statement (in millions of dollars):Sales$4,100.00Operating costs excluding depreciation3,015.00EBITDA$1,085.00Depreciation350.00EBIT$735.00Interest170.00EBT$565.00Taxes (40%)226.00Net income$339.00Looking ahead to the following year, the company's CFO has assembled this information:Year-end sales are expected to be 6% higher than $4.1 billion in sales generated last year.Year-end operating costs, excluding depreciation, will equal 70% of sales.Depreciation costs are 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 Edwin's year-end net income? Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Enter all values as positive numbers. Do not round intermediate calculations. Round your answers to two decimal places. (in millions of dollars)Sales$ Operating costs excluding depreciation EBITDA$ Depreciation EBIT$ Interest EBT$ Taxes Net income$

An income statement is a statement that shows a company's income and costs. It also displays if a…

Answered: At the end of last year, Edwin Inc.…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 19P

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Question

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

Sales	$4,100.00
Operating costs excluding depreciation	3,015.00
EBITDA	$1,085.00
Depreciation	350.00
EBIT	$735.00
Interest	170.00
EBT	$565.00
Taxes (40%)	226.00
Net income	$339.00

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

Year-end sales are expected to be 6% higher than $4.1 billion in sales generated last year.
Year-end operating costs, excluding depreciation, will equal 70% of sales.
Depreciation costs are 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 Edwin's year-end net income? Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Enter all values as positive numbers. Do not round intermediate calculations. Round your answers to two decimal places.

	(in millions of dollars)
Sales	$
Operating costs excluding depreciation
EBITDA	$
Depreciation
EBIT	$
Interest
EBT	$
Taxes
Net income	$

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