Saturday
November 29, 2014

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
EBITDA 550
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!!!
Thanks!!!
Laura

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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