Swann Systems is forecasting the following income statement for the
Operating costs (excluding depreciation and amortization) 3,000,000
Depreciation and amortization
The company’s president is disappointed with the forecast and would
like to see Swann generate higher sales and a forecasted net income
amortization) are always 60 percent of sales.
Also, assume that
depreciation and amortization, interest expense, and the company’s tax
rate, which is 40 percent, will remain the same even if sales change.
What level of sales would Swann have to obtain to generate $2,000,000
in net income?
a. $ 5,800,000
b. $ 6,000,000
c. $ 7,200,000
d. $ 8,300,000
Sales and income statement
Ozark Industries reported net income of $75 million in 2002.