Quantitative Problem: At the end of last year, Edwin Inc. reported the following income statement (in millions of dollars): Sales Operating costs (excluding depreciation) EBITDA $4,280.00 3,021.00 $1,259.00 315.00 $944.00 150.00 $794.00 198.50 595.50 Looking ahead to the following year, the company's CFO has assembled this information: Year-end sales are expected to be 6% higher than $4.28 billion in sales generated last year. ▪ Year-end operating costs, excluding depreciation, are expected to increase at the same rates as sales. . Depreciation costs are expected to increase at the same rate as sales. . Interest costs are expected to remain unchanged. . The tax rate is expected to remain at 25%. Depreciation. EBIT Interest EBT Taxes (25%). Net income On the basis of this information, what will be the forecast for Edwin's year-end net income? Enter your answers as positive values. Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answers to two decimal places. Edwin Inc. Income Statement Sales Operating costs (excluding depreciation) EBITDA Depreciation EBIT Interest EBT Taxes (25%) Net income $ (in millions of dollars) $ $ $ $ J. $
Quantitative Problem: At the end of last year, Edwin Inc. reported the following income statement (in millions of dollars): Sales Operating costs (excluding depreciation) EBITDA $4,280.00 3,021.00 $1,259.00 315.00 $944.00 150.00 $794.00 198.50 595.50 Looking ahead to the following year, the company's CFO has assembled this information: Year-end sales are expected to be 6% higher than $4.28 billion in sales generated last year. ▪ Year-end operating costs, excluding depreciation, are expected to increase at the same rates as sales. . Depreciation costs are expected to increase at the same rate as sales. . Interest costs are expected to remain unchanged. . The tax rate is expected to remain at 25%. Depreciation. EBIT Interest EBT Taxes (25%). Net income On the basis of this information, what will be the forecast for Edwin's year-end net income? Enter your answers as positive values. Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answers to two decimal places. Edwin Inc. Income Statement Sales Operating costs (excluding depreciation) EBITDA Depreciation EBIT Interest EBT Taxes (25%) Net income $ (in millions of dollars) $ $ $ $ J. $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Quantitative Problem: At the end of last year, Edwin Inc. reported the following income statement (in millions of dollars):
Sales
Operating costs (excluding depreciation)
EBITDA
Depreciation
$4,280.00
3,021.00
$1,259.00
315.00
$944.00
150.00
$ 794.00
198.50
595.50
Looking ahead to the following year, the company's CFO has assembled this information:
EBIT
Interest
EBT
Taxes (25%).
Net income
Year-end sales are expected to be 6% higher than $4.28 billion in sales generated last year.
▪ Year-end operating costs, excluding depreciation, are expected to increase at the same rates as sales.
Depreciation costs are expected to increase at the same rate as sales.
Interest costs are expected to remain unchanged.
▪ The tax rate is expected to remain at 25%.
On the basis of this information, what will be the forecast for Edwin's year-end net income? Enter your answers as positive values. Enter your answers in millions. For example, an
answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answers to two decimal places.
Edwin Inc.
Income Statement
Sales
Operating costs (excluding depreciation)
EBITDA
Depreciation
EBIT
Interest
EBT
Taxes (25%)
Net income
$
1
(in millions of dollars)
$
$
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