subject
Business, 19.02.2020 01:39 haydoc1025

Cute Camel Woodcraft Company’s income statement reports data for its first year of operation. The firm’s CEO would like sales to increase by 25% next year.1. Cute Camel is able to achieve this level of increased sales, but its interest costs increase from 10% to 15% of earnings before interest and taxes (EBIT).2. The company’s operating costs (excluding depreciation and amortization) remain at 60% of net sales, and its depreciation and amortization expenses remain constant from year to year.3. The company’s tax rate remains constant at 25% of its pre-tax income or earnings before taxes (EBT).4. In Year 2, Cute Camel expects to pay $100,000 and $1,759,500 of preferred and common stock dividends, respectively. Complete the Year 2 income statement data for Cute Camel, then answer the questions that follow. Be sure to round each dollar value to the nearest whole dollar. Cute Camel Woodcraft Company Income Statement for Year Ending December 31 Year 1 Year 2 (Forecasted)Net sales $15,000,000 Less: Operating costs, except depreciation and amortization 9,000,000 Less: Depreciation and amortization expenses 600,000 600,000Operating income (or EBIT) $5,400,000 Less: Interest expense 540,000 Pre-tax income (or EBT) 4,860,000 Less: Taxes (25%) 1,215,000 Earnings after taxes $3,645,000 Less: Preferred stock dividends 100,000 Earnings available to common shareholders 3,545,000 Less: Common stock dividends 1,458,000 Contribution to retained earnings $2,087,000 $2,539,250Given the results of the previous income statement calculations, complete the following statements:• In Year 2, if Cute Camel has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends.• If Cute Camel has 400,000 shares of common stock issued and outstanding, then the firm’s earnings per share (EPS) is expected to change from in Year 1 to in Year 2.• Cute Camel’s earnings before interest, taxes, depreciation and amortization (EBITDA) value changed from in Year 1 to in Year 2.• It is to say that Cute Camel’s net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company’s annual contribution to retained earnings, $2,087,000 and $2,539,250, respectively. This is because of the items reported in the income statement involve payments and receipts of cash.

ansver
Answers: 2

Other questions on the subject: Business

image
Business, 21.06.2019 23:00, E1nst31n44
You and your new australian bride matilda, are applying for a loan and are required to submit a balance sheet with your net worth. you own a 2008 toyota camry that you bought last month for $9,995. the kelly blue book value for this car is $13,995. you owe $8,150 on the car loan for the camry. you pay off your visa credit card every month and have not paid any credit card interest this year. the current visa credit card balance is $3,522, and the next statement is due in 15 days. you have a student loan balance of $6,500. you presently have $425 in your checking account and $1,540 in your savings account. you own 100 shares of ibm stock that you purchased for $85.50 per share. one share of ibm is now selling for $158.42. you own computers and other electronics that you purchased for $4,100 but could probably sell today on e-bay for $1,800. your gross income is $80,000 per year. what is your current net worth? (see wb ch. 2 example 2.3)
Answers: 1
image
Business, 22.06.2019 09:40, bennett2968
Boone brothers remodels homes and replaces windows. ace builders constructs new homes. if boone brothers considers expanding into new home construction, it should evaluate the expansion project using which one of the following as the required return for the project?
Answers: 1
image
Business, 22.06.2019 11:00, xxaurorabluexx
If the guide wprds on the page are "crochet " and "crossbones", which words would not be on the page. criticize, crocodile, croquet, crouch, crocus.
Answers: 1
image
Business, 22.06.2019 11:10, AM28
Your team has identified the risks on the project and determined their risk score. the team is in the midst of determining what strategies to put in place should the risks occur. after some discussion, the team members have determined that the risk of losing their network administrator is a risk they'll just deal with if and when it occurs. although they think it's a possibility and the impact would be significant, they've decided to simply deal with it after the fact. which of the following is true regarding this question? a. this is a positive response strategy. b. this is a negative response strategy. c. this is a response strategy for either positive or negative risk known as contingency planning. d. this is a response strategy for either positive or negative risks known as passive acceptance.
Answers: 2
You know the right answer?
Cute Camel Woodcraft Company’s income statement reports data for its first year of operation. The fi...

Questions in other subjects:

Konu
Health, 01.04.2021 22:30
Konu
Mathematics, 01.04.2021 22:30