Listed below is the 2015 income statement for Tom and Sue Travels, Inc.
TOM AND SUE TRAVELS, INC.
Income Statement for Year Ending December 31, 2015 (in millions of dollars)
| Net sales |
$ |
17.600 |
| Less: Cost of goods sold |
|
8.000 |
|
|
|
| Gross profits |
$ |
9.600 |
| Less: Other operating expenses |
|
3.650 |
|
|
|
Earnings before interest, taxes, depreciation,
and amortization (EBITDA) |
$ |
5.950 |
| Less: Depreciation |
|
2.800 |
|
|
|
| Earnings before interest and taxes (EBIT) |
$ |
3.150 |
| Less: Interest |
|
0.790 |
|
|
|
| Earnings before taxes (EBT) |
$ |
2.360 |
| Less: Taxes |
|
0.755 |
|
|
|
| Net income |
$ |
1.605 |
The CEO of Tom and Sue's wants the company to earn a net income of $2.800 million in 2013. Cost of goods sold is expected to be 60 percent of net sales, depreciation and other operating expenses are not expected to change, interest expense is expected to increase to $0.890 million, and the firm's tax rate will be 30 percent.
Calculate the net sales needed to produce net income of $2.800 million. (Enter your answer in millions of dollars rounded to 3 decimal places.)