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Blums Inc. expects its operating income over the coming year to equal $3 million, with a standard deviation of $500,000. Its

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7433304486694 17 9 3 I 6 I 8 7 1 9 0 5 3 I 9 5 4458275461778285569 284.1 7 41863-9865 9, 06 4 .4 3 3 3 2 2 2 1 1 1 1 0 0 0 0

Blums Inc. expects its operating income over the coming year to equal $3 million, with a standard deviation of $500,000. Its coefficient of variation is equal to 0.15.Blums must pay interest charges of $2m next year and preferred stock dividends of $100,000. Blums' marginal tax rate is 40 percent. Assume that operating income is normally distributed.) Use Table V to answer the question What is your loss level EBIT?$ Round your answer to the nearest dollar What is the probability that Blums will have negative earnings per share next year? % 10.123% would be entered as 10.12 Round your answer to two decimal places. Don't worry about interpolating. Pick the probability in the table that's closest without going over.
7433304486694 17 9 3 I 6 I 8 7 1 9 0 5 3 I 9 5 4458275461778285569 284.1 7 41863-9865 9, 06 4 .4 3 3 3 2 2 2 1 1 1 1 0 0 0 0 1670603 84155198637697704 0397670 88892518 0 6285-84-8 930 6410865 84186432 1881 5322- 672346 359410 39518 .3 3 3 2 2 2 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 2069 0300382547 08780 7543321-1 669560891 2407491929915 95196532 -- 6-6679 362 0875433 1432 5-0013 2867-916556512628 5830902 0876443 97, 543 0629 2974 032906165621519 56977098599272 7420 63511 975 4.4456 411 0 0 2 6 0 6 765432211 06396 ,4 4 4 3 3 2 2 2 21111 03076 13732523840686 2699573237 1629754321 22 8 8 9 0 3 8 4 2 3619 0 840739630752 6 5 4 3 2 2 | 9、 .4 3 3 2 2 2 2 1 1 1 1000000000000000 952568189 247-7568311 424836744702289 4 2 4 7 1 7 3 0 7 5 6543221110 348 0|9517306 ,4 4 4 3 3 3 2 2 2 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 0 2839099042511357 6680508916335 611246 53358273 054 095174073 49 4 4 3 3 3 2 2 2 8 5 3197000000000000000 .0 7 1 8 8 8 8 6 9 7 8 9 9 7 22756 27-6530917 9 3 60 0 2 4 8 4 2 14855606 2 18531 544 2 3 4 5 6 7 ,8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6
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Answer #1

Loss level of EBIT-Interest + Pre-tax preferred stock dividends $2,000,000+($100,000/(1 -0.4)) Loss level of EBIT $2.166.667

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Please show work and use this chart if needed: Blums Inc. expects its operating income over the coming year to equal $3 million, with a standard deviation of $500,000. Its coefficient of variation i...
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