Calculate the values within the table:

Prepare a pro forma 2019 Income Statement (Option A) based on the following projections:

Option A

1. A projected sales increase of 20% based on the product line expansion
2. 2019 expense projections:
3. COGS will remain at the 2018 %
4. Selling expense will increase 15%
5. General/admin expenses will increase 5%
6. Additional financing through long-term debt at 4% interest will result in an
7. increase in interest expense. Aveena anticipates needing an additional
8. $2,000,000 of long-term debt to support the sales projection.
9. Tax rate 30%
10. 76,000 shares of stock are currently issued
11. Dividend payout ratio = 50%

Option B

1. Provide a Cost of Goods illustration of the impact on Net Income if the firm was able to lower COGS to the competitor's average of 63%, under Option A financing. Illustrate the change in Net Income on both a $ and % change basis

				% Value	Option A	Change Value	COGS	Change Value
Sales		$ 2,567		$ 3,080	20%	$ 2,567
Less: Cost of Goods Sold		$ 1,711	66.65%	$ 2,053	0	$ 1,617
Gross Profits (Margin)		$ 856	33.35%	$ 1,027	0	$ 950
Less: Operation Expenses
	Selling expense	$ 108	4.21%			$ 108	0
	General $ admin exp.	$ 187	7.28%			$ 187	0
	Lease expense	$ 35	1.36%			$ 35	0
	Depreciation expense	$ 223	8.69%			$ 223	0
Total Operating Expenses		$ 553	21.54%			$ 553	0
Operating Income (EBIT)		$ 303	11.80%			$ 397
	Less: Interest expense	$ 91	3.54%			$ -
Income before taxes (EBT)		$ 212	8.26%			$ 397
	Less: Taxes		$ 64	2.49%
Net Income			$ 148	5.77%			$ 397
Earning per share (EPS)		$1.95
Dividends per share (DPS)	50%	$0.97	50%		50%		50%