At the end of last year, Edwin Inc. reported the following income statement (in millions of dollars):Sales$4,250.00Operating costs excluding depreciation3,035.00EBITDA$1,215.00Depreciation300.00EBIT$915.00Interest130.00EBT$785.00Taxes (40%)314.00Net income$471.00Looking ahead to the following year, the company's CFO has assembled this information:Year-end sales are expected to be 6% higher than $4.25 billion in sales generated last year.Year-end operating costs, excluding depreciation, will equal 80% 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$

EBITDA = Net income + taxes + interest expense + depreciation & amortization.

Answered: At the end of last year, Edwin Inc.…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 1RE: Brandt Corporation had sales revenue of 500,000 for the current year. For the year, its cost of...

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

Sales	$4,250.00
Operating costs excluding depreciation	3,035.00
EBITDA	$1,215.00
Depreciation	300.00
EBIT	$915.00
Interest	130.00
EBT	$785.00
Taxes (40%)	314.00
Net income	$471.00

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

Year-end sales are expected to be 6% higher than $4.25 billion in sales generated last year.
Year-end operating costs, excluding depreciation, will equal 80% 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	$

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