ST43 Pro forma income statement Euro Designs, Inc., expects sales during 2016 to rise from the 2015
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ST4–3 Pro forma income statement Euro Designs, Inc., expects sales during 2016 to rise from the 2015 level of $3.5 million to $3.9 million. Because of a scheduled large loan payment, the interest expense in 2016 is expected to drop to $325,000. The firm plans to increase its cash dividend payments during 2016 to $320,000. The company’s year-end 2015 income statement follows
a. Use the percent-of-sales method to prepare a 2016 pro forma income statement for Euro Designs, Inc.
b. Explain why the statement may underestimate the company’s actual 2016 pro forma income.
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Related Book For
Principles Of Managerial Finance
ISBN: 9780133546408
7th Edition
Authors: Lawrence J Gitman, Chad J Zutter
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