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Pro Forma Income Statement

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

Sales $3,000
Operating costs excluding depreciation 2,450
EBITDA 500
Depreciation 250
EBIT 300
Interest 125
EBT 175
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 percent 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 percent.

On the basis of this information, what will be the forecast for Robert's year-end net income?

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The solution explains how to prepare a pro-forma income statement based on the details provided.

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