10.4 Fuzzy Buttons before interest, taxes, depreciation, and amortization (EBITDA) value changed from in Year 1 to in Year 2.

Fuzzy Button Clothing Company Income Statement Years Ending December 31 \begin{tabular}{lcc} \hline & Year 2 (Forecasted) & Year 1 \\ \hline Net sales & 25,000,000 & $20,000,000 \\ \hline Fixed operating costs, except depreciation and amortization & (16,250,000) & (13,000,000) \\ \hline Depreciation and amortization expenses & (800,000) & (800,000) \\ \hline Net operating income (or EBIT) & 7,950,000 & $6,200,000 \\ Interest & (1,192,500) & (620,000) \\ \hline Earnings before taxes (or EBT) & (6,757,500 & $5,580,000 \\ \hline Taxes (40\%) & (2,703,000) & (2,232,000) \\ \hline Net Income & 4,054,500 & $3,348,000 \\ \hline Preferred dividends & (100,000) & (100,000) \\ \hline Earnings available to common stockholders (EAC) & 3,954,500 & $3,248,000 \\ \hline Common dividends & (1,419,075) & (1,171,800) \\ \hline Addition to retained earnings & $2,535,425 & $2,076,200 \\ \hline \end{tabular}