Question 359118
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*[tex \LARGE \ \ \ \ \ \ \ \ \ \ \text{EBITDA}\ =\ 0.45*\text{Sales}]


*[tex \LARGE \ \ \ \ \ \ \ \ \ \ \text{EBIT}\ =\ \text{EBITDA}\ - \text{D&A}]


D&A was $1M, but increased 10%, so is now $1.1M, hence:


*[tex \LARGE \ \ \ \ \ \ \ \ \ \ \text{EBIT}\ =\ 0.45*\text{Sales}\ -\ 1,100,000]


*[tex \LARGE \ \ \ \ \ \ \ \ \ \ \text{EBT}\ =\ \text{EBIT}\ -\ \text{Interest}]


Interest was $0.5M, but increased 10% so is now $0.55M, hence:


*[tex \LARGE \ \ \ \ \ \ \ \ \ \ \text{EBT}\ =\ 0.45*\text{Sales}\ -\ 1,650,000]


*[tex \LARGE \ \ \ \ \ \ \ \ \ \ \text{Net Income}\ =\ 0.60*\text{EBT}]


*[tex \LARGE \ \ \ \ \ \ \ \ \ \ \text{Net Income}\ =\ 0.60*(0.45*\text{Sales}\ -\ 1,650,000)]


Now solve for Sales as a function of Net Income (NI):


*[tex \LARGE \ \ \ \ \ \ \ \ \ \ \ 0.60*(0.45*\text{Sales}\ -\ 1,650,000)\ = \text{NI}]


*[tex \LARGE \ \ \ \ \ \ \ \ \ \ \ 0.45*\text{Sales}\ -\ 1,650,000\ = \frac{\text{NI}}{0.6}]


*[tex \LARGE \ \ \ \ \ \ \ \ \ \ \ 0.45*\text{Sales}\ = \frac{\text{NI}}{0.6}\ +\ 1,650,000]


*[tex \LARGE \ \ \ \ \ \ \ \ \ \ \ \text{Sales}\ = \frac{\frac{\text{NI}}{0.6}\ +\ 1,650,000}{0.45]


Don't forget to round your answer.
 

John
*[tex \LARGE e^{i\pi} + 1 = 0]
My calculator said it, I believe it, that settles it
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