Question
Company A has the current income statement below..Remember to show all your calculations for each question.Assuming a projected increase in sales of 12%annually, a gross
Company A has the current income statement below..Remember to show all your calculations for each question.Assuming a projected increase in sales of 12%annually, a gross profit margin this year of 19.23%, an operating profit margin this year of 16.31 and a called dividend each year of 16% of after tax earnings,
1-complete the income statement below
2-preapare two subsequent years of pro formas
3-what is the gross profit margin for year
4-what is the operating profit margin for year
5-what is the gross profit margin for year
6-what is the operating profir margin for year
7-what is the compound annual growth rate of dividends from year 1 to year 3
8-What is the growth rate of the company's after tax earnings from year 1 to 3
9-If the company too 45% of this year's net profits after taxes and invested in a new line of business with anticipated cash flows of %60.000, $65.000 and $75.000and $90.000 over the next four years , assuming a 10% discount rate, what is the project NPV ?
10- Would you recommend the project considered in question 9 above?Why or Why not?
Income Statement of Company A
Sales Revenue $4,396,223
Less COGS
Fixed Costs
Variable costs(42%)
GrossProfits
Less Operating Expenses
Fixed expenses
Variable expenses(2.8%)
Operating Profits
Less Interest Expense (2.7%)
Net Profits before taxes
Less Taxes(21%)
Net Profits after taxes
LessDivident
Increased Retained Earnings
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