January 26, 2015

Homework Help: Principles of Finance HELP!!!

Posted by Laura on Friday, September 29, 2006 at 9:46pm.

Problem 16-7. Pro forma income statement At the end of last year, Roberts Inc. reported the following income statement (in millions of dollars):

Sales 3000
Operating costs excluding depreciation 2450
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 7% higher than the $3 billion in sales generated last year.
--Year-end operating costs excluding depreciation are expected to equal 65% of year-end sales.
--Depreciation is 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 Roberts' year-end net income? Round the answer to the nearest hundredth.

I'm having trouble figuring out the correct net income for this problem!!!

Hope anyone can help me!!!

Due to a techincal breakthrough,theb fix costs for a firm drop by 25%. Prior to this breakthrough fixed costs were 100,000 and unit contribution margin was and remains at 5.00. The new amount of break-even units will be:

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