Hermann Industries is forecasting the following income statement:
- Sales $5,000,000
- Operating costs excluding depreciation & amortization 2,750,000
- EBITDA $2,250,000
- Depreciation and amortization 600,000
- EBIT $1,650,000
- Interest 500,000
- EBT $1,150,000
- Taxes (40%) 460,000
- Net income $690,000
The CEO would like to see higher sales and a forecasted net income of $1,380,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 11%. The tax rate, which is 40%, will remain the same. What level of sales would generate $1,380,000 in net income?