Cold Goose Metal Works Inc.$\text{'}$s income statement reports data for its first year of operation. The firm's CEO would like sales to increase by $25\%$ next year.

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 $70\%$ of net sales, and its depreciation and amortization expenses remain constant from year to year.

The company's tax rate remains constant at $40\%$ of its pre$-$tax income or earnings before taxes $($EBT$).$

In Year $2,$ Cold Goose expects to pay $$200,000$ and $$1,537,650$ of preferred and common stock dividends, respectively.

Cold Goose Metal Works Inc. Income Statement

For Year Ending December $31$

$\backslash$table$[[$Net sales,Year $1,$Year $2($Forecasted$)],[$Less: Operating costs, except depreciation and amortization,$21,000,000,],[$Less: Depreciation and amortization expenses,$1,200,000,],[$Operating income $($or EBIT$),$$$7,800,000,],[$Les$$s: Interest expense,$780,000,],[$Pre$-$tax income $($or EBT$),7,020,000,2,808,000$