Blue Hamster Manufacturing Inc.

Income Statement Cold Goose 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 $60\%$ 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 $2,$ Cold Goose expects to pay $$100,000$ and $$2,052,750$ of preferred and common stock dividends, respectively.