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Construct a proforma income statement using the information given below.   Ernie’s Echos, Inc. (EEI), projects unit...

Construct a proforma income statement using the information given below.  

Ernie’s Echos, Inc. (EEI), projects unit sales for a new six-octave voice emulation implant as follows:

Year

Unit Sales

1

110,000

2

127,000

3

115,000

4

98,000

5

92,000

6

75,000

Total fixed costs are $1,850,000 per year, variable production costs are $315 per unit, and the units are priced at $455 each. The equipment needed to begin production has an installed cost of $27,500,000. Because the implants are intended for professional singers, this equipment is considered industrial machinery and thus qualifies as seven-year MACRS property. EEI is in the 22 percent marginal tax bracket. Construct the proforma income statement (using Excel) to compute net income and operating cash flow.

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Formulas will be as follows:

jeff jeffy answered 2 years ago
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