Master Wood Carvers, Inc. currently has $134,000 of sales and net income of $15,600. The firm is expecting sales growth of 6% next year. Costs are a constant percentage of sales. What is the projected net income for next year?

Question

Quizplus · Accepted Answer

Given that costs are a constant percentage of sales and sales are expected to grow by 6%, the net income will also grow by 6%. The calculation is as follows: $15,600 * 1.06 = $16,536.