8. Hebner Housing Corporation has forecast the following numbers for this upcoming year: Sales $1,000,000 Cost of Goods Sold 600
,000 Interest Expense 100,000 Net Income 180,000 The company is in the 40 percent tax bracket. Its cost of goods sold always represents 60 percent of its sales. The company’s CEO is unhappy with the forecast and wants the firm to achieve a net income equal to $300,000. Assume that Hebner’s interest expense remains constant. In order to achieve this level of net income, what level of sales will the company have to achieve?
1 answer:
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Answer:
OPTION C i.e 11%
Option A i.e 30.55 year
Explanation:
we know that capital can be calculated as
from the data given in question we can calculate the value of r
so
solving for r we get
r = 11%
option C
we know that
from the data given we can evealueate the value of n
solving for n we get
n = 30.55 year.
Option A