Swann systems is forecasting the following income statement for the upcoming year:
sales $5,000,000
operating costs(excluding depreciation) 3,000,000
gross margin $2,000,000
depreciation 500,000
EBIT $1,500,000
interest 500,000
EBT $1,000,000
taxes (40%) 400,000
net income $ 600,000
the company's president is disappointed with the forcast and would like to see swann generate higher sales and a forecasted net income of $2,000,000.
assume that operating costs (excluding depreciation) are always 60% of sales. also assume that depreciation, interest expense, and the company's tax rate which is 40% will remain the same even if sales change. what level of sales would swann have o obtain to generate $2,000,000 in net income?
A. $10,833,333
B. $9,800,000
C. $18,300,000
D. $17,200,000