Blue Hamster Manufacturing Inc. Income Statement For Year Ending December 31 \begin{tabular}{l} \hline Net sales \\ Less: Operating costs, except depreciation and amortization \\ Less: Depreciation and amortization expenses \\ Operating income (or EBIT) \\ Less: Interest expense \\ Pre-tax income (or EBT) \\ Less: Taxes (40\%) \\ Earnings after taxes \\ Less: Preferred stock dividends \\ Earnings available to common shareholders \\ Less: Common stock dividends \\ Contribution to retained earnings \\ \end{tabular} Blue Hamster Manufacturing Inci's income statement reports data for its first year of operation. The firm's CEO would like sales to increase by 25% next year. 1. 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 (EBM). 2. 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. 3. The company's tax rate remains constant at 40% of its pre-tax income or eaInings before taxes (EBT). 4. In Year 2, Blue Hamster expects to pay $200,000 and $1,824,525 of preferred and common stock dividends, respectively. - In Year 2, if Blue Hamster has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. - If Blue Hamster has 400,000 shares of common stock issued and outstanding, then tile firm's earnings per share (EPS) is expected to change from in Year 1 to in Year 2. - Blue Hamster's before interest, taxes, depreciation and amortization (EBITDA) value changed from in Year 1 to in Year 2. - It is to say that Blue Hamster's net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company's annual contribution to retained eamings. This is because of the item reported in the income statement involve payments and receipts of cash