1. Your company earned $165,000 last year. You have forecasted 3% earnings growth for the next 4 years (years 1-4). Based on this forecast, how much do you expect to earn in year 4?

2. ABC had $12,000 in Net Income last year. They paid $5,000 in Dividends and reinvested the remaining $7,000 in the company. If ABC earns a 25% return on its investment, what would the Net Income be this year?