Austin Grocers recently reported the following 2019 income statement (in millions of dollars): Sales $700 Operating costs including depreciation 500 EBIT $200 Interest 40 EBT $160 Taxes (25%) 40 Net income $120 Dividends $40 Addition to retained earnings $80 For the coming year, the company is forecasting a 30% increase in sales, and it expects that its year-end operating costs, including depreciation, will equal 70% of sales. Austin's tax rate, interest expense, and dividend payout ratio are all expected to remain constant. a. What is Austin's projected 2020 net income? Enter your answer in millions. For example, an answer of $13,000,000 should entered as 13. Round your answer to two decimal places. million b. What is the expected growth rate Austin's dividends? Do not round intermediate calculations. Round your answer to two decimal places.
Austin Grocers recently reported the following 2019 income statement (in millions of dollars): Sales $700 Operating costs including depreciation 500 EBIT $200 Interest 40 EBT $160 Taxes (25%) 40 Net income $120 Dividends $40 Addition to retained earnings $80 For the coming year, the company is forecasting a 30% increase in sales, and it expects that its year-end operating costs, including depreciation, will equal 70% of sales. Austin's tax rate, interest expense, and dividend payout ratio are all expected to remain constant. a. What is Austin's projected 2020 net income? Enter your answer in millions. For example, an answer of $13,000,000 should entered as 13. Round your answer to two decimal places. million b. What is the expected growth rate Austin's dividends? Do not round intermediate calculations. Round your answer to two decimal places.
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter18: Cost-volume-profit Analysis (cvp)
Section: Chapter Questions
Problem 1R: Poleski Manufacturing, which maintains the same level of inventory at the end of each year, provided...
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