A proposed new investment has projected sales of $750,000

Accounting Mar 26, 2021

A proposed new investment has projected sales of $750,000. Variable costs are 55 percent of sales, and fixed costs are $182,500; depreciation is $86,000. Assume a tax rate of 35 percent.

What is the projected net income?

Expert Solution

Answer:

Sales	750000
Less Variable Cost	412500
Fixed Costs	182500
Depreciation	86000
EBT	69000
Less Tax	24150
Net Income	44850

Answer is $44850.

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