Use the information about Billy's Burgers to answer the following question(s):

-Using the percent of sales method, and assuming 20% growth in sales and no change in interest expense, estimate Billy's Burgers' Pretax Income for 2011.
A) $23.28 million
B) $35.76 million
C) $24.84 million
D) $38.16 million

Question

Use the information about Billy's Burgers to answer the following question(s):
 
-Using the percent of sales method, and assuming 20% growth in sales and no change in interest expense, estimate Billy's Burgers' Pretax Income for 2011.
A) $23.28 million 
B) $35.76 million 
C) $24.84 million 
D) $38.16 million

Quizplus · Accepted Answer

D) Pretax income = EBIT - Interest
Pretax income = ($41.8 million × (1 + 20%) - $12 million = $38.16 million

Use the Information About Billy's Burgers to Answer the Following