Consider the following scenario: Green Caterpillar Garden Supplies Inc.'s Income statement reports data for its first year of operation. The firm's CEO would like sales to increase by Tools 25% next year. ps 1. Green Caterpillar 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). 2. 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. 3. The company's tax rate remains constant at 25% of its pre-tax income or earnings before taxes (EBT). 4. In Year 2, Green Caterpillar expects to pay $300,000 and $1,319,625 of preferred and common stock dividends, respectively. ps Complete the Year 2 income statement data for Green Caterpillar, then answer the questions that follow. Be sure to round each dollar value to the nearest whole dollar Year 2 (Forecasted) Green Caterpillar Garden Supplies Inc. Income Statement for Year Ending December 31 Year 1 $10,000,000 6,000,000 400,000 $3,600,000 360,000 400,000 - 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 (25%) Earnings after taxes Less: Preferred stock dividends Earnings available to common shareholders Less: Common stock dividends Contribution to retained earnings 3,240,000 810,000 $2,430,000 300,000 2,130,000 1,093,500 $1,036,500 $1,312,875 Given the results of the previous income statement calculations, complete the following statements: In Year 2, if Green Caterpillar has 25,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends. . If Green Caterpillar has 200,000 shares of common stock issued and outstanding, then the firm's earnings per share (EPS) is expected to change from in Year 1 to In Year 2. . Green Caterpillar's earnings before interest, taxes, depreciation and amortization (EBITDA) value changed from In Year 1 to in Year 2 . It is to say that Green Caterpillar'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 earnings, $1,036,500 and $1,312,875, respectively. This is because of the items reported in the income statement involve payments and receipts of cash