Use AstroTurf Company’s income statement below to answer the following questions.
Operating costs (excl. depreciations & amortization): $4.5m
Depreciation and amortization: $1.5m
Interest: $0.7m
Net Income: $2.8m
Tax Rate: 35%
1. Calculate AstroTurf’s EBITDA.
Input your final answer here :
Explanation: Provide a step-by-step explanation for how you arrived at your above solution as though you were teaching a student to solve this type of problem. Provide a clear explanation, showing any steps or processes used to reach the answer.
2. What level of sales would generate a net income of $4.2m for the following year, knowing that operating costs (excl. depreciation and amortization) will increase by 7.5%, and given a 35% tax rate.
Explanation: Provide a step-by-step explanation for how you arrived at your solution as though you were teaching a student to solve this type of problem.
