PRO FORMA INCOME STATEMENT At the end of last year, Roberts Inc. reported the following income statement (in millions of dollars): Looking ahead to the following year, the company’s CFO has assembled this information: Year-end sales are expected to be 10% higher than the $3 billion in sales generated last year. Year-end operating costs, excluding depreciation, are expected to equal 80% of year-end sales. Depreciation is 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 that information, what will be the forecast for Roberts’ year-end net income?

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Fundamentals Of Financial Manageme...

10th Edition
Eugene F. Brigham + 1 other
Publisher: Cengage Learning
ISBN: 9781337902571
BuyFind

Fundamentals Of Financial Manageme...

10th Edition
Eugene F. Brigham + 1 other
Publisher: Cengage Learning
ISBN: 9781337902571

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Chapter 16, Problem 7P
Textbook Problem

PRO FORMA INCOME STATEMENT At the end of last year, Roberts Inc. reported the following income statement (in millions of dollars):

Chapter 16, Problem 7P, PRO FORMA INCOME STATEMENT At the end of last year, Roberts Inc. reported the following income

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

  • Year-end sales are expected to be 10% higher than the $3 billion in sales generated last year.
  • Year-end operating costs, excluding depreciation, are expected to equal 80% of year-end sales.
  • Depreciation is 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 that information, what will be the forecast for Roberts’ year-end net income?

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