Blue Hamster 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$).$

The company's operating costs $($excluding depreciation and amortization$)$ remain at $65\%$ of net sales, and its depreciation and

amortization expenses remain constant from year to year.

The company's tax rate remains constant at $25\%$ of its pre$-$tax income or earnings before taxes $($EBT$).$

In Year $2,$ Blue Hamster expects to pay $$150,000$ and $$1,267,031$ of preferred and common stock dividends, respectively.

Complete the Year $2$ income statement data for Blue Hamster, then answer the questions that follow. Be sure to round each dollar value to the nearest

whole dollar.

Blue Hamster Manufacturing Inc.

Income Statement for Year Ending December $31$

Given the results of the previous income statement calculations, complete the following statements: