Jim's Espresso expects sales to grow by 10.4% next year. Using the following statements LOADING... and the percent of sales method, forecast: a. Costs b. Depreciation c. Net Income d. Cash e. Accounts receivable f. Inventory g. Property, plant, and equipment (Note: Make sure to round all intermediate calculations to at least five decimal places.) The Tax Cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career. Income Statement Sales $207,620 Costs Except Depreciation (100,360) EBITDA $107,260 Depreciation (6,050) EBIT $101,210 Interest Expense (net) (500) Pretax Income $100,710 Income Tax (35,249) Net Income $65,461 Balance Sheet Assets Cash and Equivalents $14,990 Accounts Receivable 1,980 Inventories 4,050 Total Current Assets $21,020 Property, Plant and Equipment 9,910 Total Assets $30,930 Liabilities and Equity Accounts Payable $1,470 Debt 3,990 Total Liabilities $5,460 Stockholders' Equity 25,470 Total Liabilities and Equity $30,930

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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Question

Jim's Espresso expects sales to grow by

10.4%

next year. Using the following statements

and the percent of sales method, forecast:

a. Costs

b. Depreciation

c. Net Income

d. Cash

e. Accounts receivable

f. Inventory

g. Property, plant, and equipment

(Note:

Make sure to round all intermediate calculations to at least five decimal places.)

The Tax Cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career.

Income Statement
Sales $207,620
Costs Except Depreciation (100,360)
EBITDA $107,260
Depreciation (6,050)
EBIT $101,210
Interest Expense (net) (500)
Pretax Income $100,710
Income Tax (35,249)
Net Income $65,461

Balance Sheet
Assets
Cash and Equivalents $14,990
Accounts Receivable 1,980
Inventories 4,050
Total Current Assets $21,020
Property, Plant and Equipment 9,910
Total Assets $30,930

Liabilities and Equity
Accounts Payable $1,470
Debt 3,990
Total Liabilities $5,460
Stockholders' Equity 25,470
Total Liabilities and Equity $30,930

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