Devaney Convenience recently reported the following 2018 income statement (in millions of dollars): Sales $700 Operating costs including depreciation $500 EBIT Interest EBT Taxes (40%) Net income Dividends Addition to retained earnings $200 $40 $160 $64 $96 $32 $64 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 75% of sales. Devaney's tax rate, interest expense, and dividend payout ratio are all expected to remain constant. What is Devaney's projected 2019 net income? a) $112.50 b) $104.00 c) $132.00 d) $222.00 e) $250.00
Devaney Convenience recently reported the following 2018 income statement (in millions of dollars): Sales $700 Operating costs including depreciation $500 EBIT Interest EBT Taxes (40%) Net income Dividends Addition to retained earnings $200 $40 $160 $64 $96 $32 $64 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 75% of sales. Devaney's tax rate, interest expense, and dividend payout ratio are all expected to remain constant. What is Devaney's projected 2019 net income? a) $112.50 b) $104.00 c) $132.00 d) $222.00 e) $250.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Devaney Convenience recently reported the following 2018 income statement (in millions of
dollars):
Sales
$700
Operating costs including depreciation $500
EBIT
Interest
EBT
Taxes (40%)
Net income
Dividends
Addition to retained earnings
$200
$40
$160
$64
$96
$32
$64
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 75% of sales. Devaney's tax rate,
interest expense, and dividend payout ratio are all expected to remain constant.
What is Devaney's projected 2019 net income?
a) $112.50
b) $104.00
c) $132.00
d) $222.00
e) $250.00
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