Question

Quantitative Problem: At the end of last year, Edwin Inc. reported the following income statement (in millions of dollars):

Sales $4,100.00

Operating costs excluding depreciation 3,011.00

EBITDA $1,089.00

Depreciation 300.00

EBIT $789.00

Interest 150.00

EBT $639.00

Taxes (40%) 255.60

Net income $383.40

Looking ahead to the following year, the company's CFO has assembled this information:

• Year-end sales are expected to be 6% higher than $4.1 billion in sales generated last year.
• Year-end operating costs, excluding depreciation, will equal 60% of 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 40%.

On the basis of this information, what will be the forecast for Edwin's year-end net income? Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Enter all values as positive numbers. Do not round intermediate calculations. Round your answers to two decimal places.

	(in millions of dollars)
Sales	$ __________
Operating costs excluding depreciation	__________
EBITDA	$ __________
Depreciation	__________
EBIT	$ __________
Interest	___________
EBT	$ __________
Taxes	___________
Net income	$ __________

Answer 1

	(in millions of dollars)
Sales	$                         4,346.00
Operating costs excluding depreciation	$                         2,607.60
EBITDA	$                         1,738.40
Depreciation	$                             318.00
EBIT	$                         1,420.40
Interest	$                             150.00
EBT	$                         1,270.40
Taxes	$                             508.16
Net Income	$                             762.24

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