A proposed new investment has projected sales of $720,000. Variable costs are 60

Question

A proposed new investment has projected sales of $720,000. Variable costs are 60 percent of sales, and fixed costs are $161,000; depreciation is $62,000. Prepare a pro forma income statement assuming a tax rate of 30 percent. What is the projected net income? (Input all amounts as positive values. Do not round intermediate calculations.)

A proposed new investment has projected sales of $720,000. Variable costs are 60 percent of sales, and fixed costs are $161,000; depreciation is $62,000. Prepare a pro forma income statement assuming a tax rate of 30 percent. What is the projected net income? (Input all amounts as positive values. Do not round intermediate calculations.)

Explanation / Answer

Sales 7,20,000 Variable Cost 4,32,000 Fixed Costs 1,61,000 EBDT 1,27,000 Depreciation 62,000 EBT          65,000 Tax          19,500 Net Income          45,500

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