Question

1.	Green Caterpillar 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 65.00% of net sales, and its depreciation and amortization expenses remain constant from year to year.
3.	The company’s tax rate remains constant at 40% of its pre-tax income or earnings before taxes (EBT).
4.	In Year 2, Green Caterpillar expects to pay $100,000 and $1,419,075 of preferred and common stock dividends, respectively. Chapter 2 Assignment Green Caterpillar Garden Supplies Inc. Income Statement for Year Ending December 31 Year 2 (Forecasted) Net sales A-Z Less: Operating costs, except depreciation and amortization Less: Depreciation and amortization expenses Operating income (or EBIT) 800,000 $ Less: Interest expense Pre-tax income (or EBT) Less: Taxes (40%) Earnings after taxes Less: Preferred stock dividends Earnings available to common shareholders Year 1 $20,000,000 13,000,000 800,000 $6,200,000 620,000 $5,580,000 2,232,000 $3,348,000 100,000 $3,248,000 1,171,800 $1,828,925 Less: Common stock dividends Contribution to retained earnings $2,535,425 Days Left Given the results of the previous income statement calculations, complete the following statements: from • In Year 2, if Green Caterpillar has 10,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. • If Green Caterpillar has 500,000 shares of common stock issued and outstanding, then the firm's earnings per share (EPS) is expected to change in Year 1 to in Year 2. • Green Caterpillar's before interest, taxes, depreciation and amortization (EBITDA) value changed from in Year 1 to in Year 2. to say that Green Caterpillar'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, $1,828,925 and $2,535,425, respectively. This is because of the items reported in the income statement involve payments and receipts of cash. . It is

Answer 1

26/01/2018 Green Colentillas. Ganden. Veeples. These گ ونی Simonellolumeab. 4 Paulilas Net Sales 10 Yearl($11 Veu 20.000.000 125 13000000 H615 3.80000 20000 116 150 000 12. Operating cost encept Deprualion- 42 l depredatión 6200 OUD196 620 OUD ila 1950000 11192500 T6757550 opulatini, income (EBIT) 140545.00 ----- Untucrat in pensi 5 530,000 6754 Pre-tan income Lt 2232 000 27030 14 Tan @uol. 2 haring after 3,348,000 Tan 100 000 +- Prefinee dividend 100 000 larings available for equily 3248 000 3954500 -Common stock dividend U 71800 1419075 .Contribution to sutainlid sorting 18289252535423 ----- 1.) In year 2, 'y Green Caterpillar has 10,000 share of prefered útočk atividend Rue stock - $100.000 - $10 per shark Cßufored' holder) 10000 22.|EPS ). basuing available to common Sharkholdere Omo. of Butstanding Shanes, Yeaul 2$3248000 97 $6.496. Bur. share 500000 ? your 2 1 839 54500 $7.909 for share JODODO

Pue 32 EBITDA Yeast $20,000; 000 - $13,000,000 ) =7$7,000,000 Year 22 ($ 25,000,000 - $164250,000 a $ $750,000 Y a) Correct to Sales