Based on the above, the company’s expected sales is said to be $66.67M.
<h3>What is the company’s expected sales about?</h3>
Note that the said company's expected sales be titled as X.
In the question, The Net cash flow is given. therefore the equation will be:
X - 0.75X = 0.25X
Hence: Sales minus expenses = EBITDA
So, we have to minus depreciation, amortization, interest and tax to get the profit after tax and depreciation and amortization will be added to get the net cash flow.
So:
(0.25X - $5M - (0.25X - $5M) X 0.40) + $5M = $12M
0.15X -$5M - 0.10X + $2M = $7M
and/or 0.15X - 3M = $7M
and/or X = $10M/0.15
= $66.67M
Hence, Based on the above, the company’s expected sales is said to be $66.67M.
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