Fresno Salads has current sales of $6,000 and a profit margin of 6.5 percent. The firm...

Fresno Salads has current sales of $6,000 and a profit margin of 6.5 percent. The firm estimates that sales will increase by 4 percent next year and that all costs will vary in direct relationship to sales. What is the pro forma net income?

A. $303.33

B. $327.18

C. $405.60

D. $438.70

E. $441.10

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Expert Solution

Net income = Current sales * Profit margin * (1 + Increase sales)

Net income = $6,000 * 0.065 * (1 + 0.04)

Net income = $405.60

jeff jeffy answered 2 years ago

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