For 2005, Miami Metals reported $10,000 of sales, $6,000 of operating costs other than depreciation,...
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For 2005, Miami Metals reported $10,000 of sales, $6,000 of operating costs other than depreciation, and $1,500 of depreciation. The company had no amortization charges, it had $4,000 of bonds that carry a 10% interest rate, and its federal-plus-state income tax rate was 40%. 2006 data are expected to remain unchanged except for two items: depreciation, which is expected to increase by $500 and sales, which are expected to increase by 2,100. By how much will the net income change as a result of the change in depreciation and sales? The company uses the same depreciation calculations for tax and stockholder reporting. Write your answer as positive and in dollar terms
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