4. Income statement Aa The income statement, also known as the profit and loss statement, helps calculate the firm's net income that is available to shareholders. The income statement is usually prepared using the International Financial Reporting Standards (IFRS), which match revenues and expenses to the period in which they were incurred, not necessarily when cash was received or paid. The following is the income statement of Three Waters Co. in its first year of operation Three Waters Co. Income Statement For the Year Ending on December 31 (Millions of dollars) Year Net sales $4,000 3,200 160 3,360 640 64 576 230 346 Operating costs, except depreciation and amortization Total operating costs Operating income (or EBIT) Less: Interest Earnings before taxes (EBT) Less: Taxes (40%) Net income available to shareholders The firm's CEO would like sales to increase by 25% next year. Assume that (1) the operating costs (excluding depreciation and amortization) remain at 80% of sales, (2) depreciation and amortization remain at 4% of sales, and (3) the interest cost increases from 10% to 15% of earnings before interest and taxes (EBIT)The tax rate of 40% also remains the same. What will be the company's operating income in the second year? $508 million $640 million $800 million $1,000 million Different companies have different debt-related expenses, in any of these expenses will have an impact on the company's changes occur while everything else remains the same, which statements are true? Check all that apply. other write-offs. Changes that the following An increase in depreciation and amortization expenses will lead to an increase in the net income. A decrease in interest expense will lead to an increase in the net income. A decrease in the tax rate will lead to an increase in the net income. An increase in operating costs will lead to a decrease in the operating income. An increase in total operating costs will lead to an increase in the net income. Three Waters Co. had 25 million shares of common stock outstanding in both years. What will be the firm's earnings per share (EPS) in the second year? O $32.00 O $27.20 O $168.00 O $16.32