PRO FORMA INCOME STATEMENT At the end of last year, Roberts Inc. reported the following income statement (in millions of dollars):
Sales | $3,000 |
Operating costs excluding depreciation | 2,450 |
EBITDA | $ 550 |
Depreciation | 250 |
EBIT | $ 300 |
Interest | 125 |
EBT | $ 175 |
Taxes (40%) | 70 |
Net income | $ 105 |
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 40%.
On the basis of that information, what will be the forecast for Roberts’ year-end net income?
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