Austin Grocers recently reported the following 2016 income statement (in millions of dollars): Sales $700 Operating costs including depreciation EBIT Interest EBT Taxes (40%) Net income 500 $200 40 $160 64 $96 $37 564 Dividends Addition to retained earnings For the coming year, the company is forecasting a 35% increase in sales, and it expects that its year end operating costs, including depreciation, will equal 75% of sales. Austin's tax rate, interest expense, and dividend payout ratio are all expected to remain constant. a. What is Austin's projected 2017 net income? Enter your answer in millions. For example, an answer of $13,000,000 should be entered as 13. Round your answer to two decimal places million b. What is the expected growth rate in Austin's dividends? Do not round your intermediate calculations. Round your answer to two decimal places.
Austin Grocers recently reported the following 2016 income statement (in millions of dollars): Sales $700 Operating costs including depreciation EBIT Interest EBT Taxes (40%) Net income 500 $200 40 $160 64 $96 $37 564 Dividends Addition to retained earnings For the coming year, the company is forecasting a 35% increase in sales, and it expects that its year end operating costs, including depreciation, will equal 75% of sales. Austin's tax rate, interest expense, and dividend payout ratio are all expected to remain constant. a. What is Austin's projected 2017 net income? Enter your answer in millions. For example, an answer of $13,000,000 should be entered as 13. Round your answer to two decimal places million b. What is the expected growth rate in Austin's dividends? Do not round your intermediate calculations. Round your answer to two decimal places.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Austin Grocers recently reported the following 2016 income statement (in millions of dollars):
Sales
$700
Operating costs including depreciation
500
EBIT
$200
40
Interest
EBT
Taxes (40%)
Net income.
$160
64
$96
$32
564
Dividends
Addition to retained earnings i
For the coming year, the company is forecasting a 35% increase in sales, and it expects that its year end operating costs, including depreciation, will equal 75% of sales. Austin's tax rate,
interest expense, and dividend payout ratio are all expected to remain constant.
a. What is Austin's projected 2017 net income? Enter your answer in millions. For example, an answer of $13,000,000 should be entered as 13. Round your answer to two decimal places.
million
b. What is the expected growth rate in Austin's dividerids? Do not round your intermediate calculations. Round your answer to two decimal places.
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