Solve this problem with the explanation Devaney Convenience recently reported the following 2018 income statement (inmillions of dollars):Sales$700Operating costs including depreciation $500EBITInterestEBTTaxes (40%)Net incomeDividendsAddition to retained earnings$200$40$160$64$96$32$64For the coming year, the company is forecasting a 30% increase in sales, and itexpects that its year-end operating costs, including depreciation, will equal 75% ofsales. Devaney's tax rate, interest expense, and dividend payout ratio are allexpected to remain constant.What is Devaney's projected 2019 net income?a) $112.50b) $104.00c) $132.00d) $222.00e) $250.00

Step 1: Step 2:Devaney's projected 2019 net income is $112.50 millionBased on assumptions that the…

Answered: Devaney Convenience recently reported…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 20P

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