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Calculating Projected Net Income

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A proposed new investment has projected sales of $740,000. Variable costs are 60% of sales, and fixed costs are $173,000; depreciation is $75,000.

Try to prepare a pro forma income statement assuming a tax rate of 35%, and figure out the projected net income.

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Solution Summary

The solution explains step-by-step how to calculate the projected net income.

Solution Preview

We make the proforma income statement:
Sales 740,000
Variable cost (740,000X60%) ...

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