At the end of last year, Firm c reported the following income statement (in millions of dollars)
Operating costs excluding depreciation 2,450
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% higher than the $3 billion in sales generated last year.
Year end operating costs, excluding depreciation, are expected to equal 80 percent of year end sales.
Depreciation is expected to increase at the same rate of 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 Company c's year-end net income?© BrainMass Inc. brainmass.com June 3, 2020, 9:45 pm ad1c9bdddf
Please refer attached Excel file for better clarity of calculations and tables.
All figures in million dollars
Let us study the effect of various forcasts
Expected sales: 10% increase : 3300
Expected Operating costs excluding depreciation : 80% of sales : ...
Solution describes the steps in findind projected net income based on estimates for sales, operating costs, depriciations etc.