Sales $700 Operating costs including depreciation 500 EBIT $200 Interest 40 EBT $160 Taxes (40%) 64 Net income $ 96 Dividends $ 32 Addition to retained earnings $ 64 For the coming year, the company is forecasting a 25% increase in sales, and it expects th operating costs, including depreciation, will equal 70% of sales. Austin's tax rate, interest dividend payout ratio are all expected to remain constant.

Sales $700 Operating costs including depreciation 500 EBIT $200 Interest 40 EBT $160 Taxes (40%) 64 Net income $ 96 Dividends $ 32 Addition to retained earnings $ 64 For the coming year, the company is forecasting a 25% increase in sales, and it expects th operating costs, including depreciation, will equal 70% of sales. Austin's tax rate, interest dividend payout ratio are all expected to remain constant.

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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