Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Austin Grocers recently reported the following 2021 income statement (in millions of dollars): Sales Operating costs including depreciation EBIT $700 500 $200 Interest 40
Austin Grocers recently reported the following 2021 income statement (in millions of dollars): Sales Operating costs including depreciation EBIT $700 500 $200 Interest 40 $160 40 EBT Taxes (25%) Net income Dividends Addition to retained earnings $120 $40 $80 For the coming year, the company is forecasting a 25% increase in sales, and it expects that its year-end operating costs, including depreciation, will equal 70% of sales. Austin's tax rate, interest expense, and dividend payout ratio are all expected to remain constant. a. What is Austin's projected 2022 net income? Enter your answer in millions. For example, an answer of $13,000,000 should be entered as 13. Do not round intermediate calculations. Round your answer to two decimal places. million b. What is the expected growth rate in Austin's dividends? Do not round intermediate calculations. Round your answer to two decimal places. %
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started