Silver's Jewelers has current sales of $138,900 and a profit margin of 8 percent. The firm estimates that sales will increase by 4% next year and that all costs will vary in direct proportion to sales. What is the pro forma net income?

Question

Quizplus · Accepted Answer

To calculate the pro forma net income, first calculate the projected sales: $138,900 * 1.04 = $144,456. Then, apply the profit margin: $144,456 * 0.08 = $11,556.48.

Silver's Jewelers Has Current Sales of $138,900 and a Profit