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musickatia [10]
2 years ago
8

A proposed new investment has projected sales of $850,000. Variable costs are 60 percent of sales, and fixed costs are $174,000;

depreciation is $75,000. Prepare a pro forma income statement assuming a tax rate of 30 percent. What is the projected net income
Business
1 answer:
777dan777 [17]2 years ago
3 0

Answer:

  • <u>63,700</u>

Explanation:

Sales:                                                 850,000

Variable Cost: (850,000*60%) =      <u>510,000</u>

Contribution Margin = 850k-510k= <em>340,000</em>

Fixed cost =                                       174,000

Depreciation =                                    <u>75,000</u>

Earnings Before Taxes =                    <em>91,000</em>

Taxes (30%) =                                    <u>  (27,300)</u>

<h3>Net Income                                 <u>63,700</u></h3>

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