1. Cute Camel is able to achieve this level of increased sales, but its interest costs increase from 10% to 15% of earnings before. interest and taxes (EBIT). 2. The company's operating costs (excluding depreciation and amortization) remain at 70% of net sales, and its depreciation and amortization expenses remain constant from year to year. 3. The company's tax rate remains constant at 25% of its pre-tax income or earnings before taxes (EBT). 4. In Year 2, Cute Camel expects to pay $200,000 and $1,281,375 of preferred and common stock dividends, respectively. Complete the Year 2 income statement data for Cute Camel, then answer the questions that follow. Be sure to round each dollar value to the nearest whole dollar. Cute Camel Woodcraft Company Income Statement for Year Ending December 31 Year 1 Year 2 (Forecasted) Net sales i $20,000,000 14,000,000 Less: Operating costs, except depreciation and amortization Less: Depreciation and amortization expenses 800,000 800,000 Operating income (or EBIT) $5,200,000 Less: Interest expense $20,000 Pre-tax income (or EBT) 4,680,000 Less: Taxes (25%) 1,170,000 Earnings after taxes $3,510,000 Less: Preferred stock dividends 200,000 Earnings available to common shareholders 3,310,000 Less: Common stock dividends 1,053,000 Contribution to retained earnings $2,257,000 47.789 #75