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Cute Camel Woodcraft CompanyChapter 3 Assignment Blue Hamster is able to achieve this level of increased sales, but its interest costs increase from 1 0

Cute Camel Woodcraft CompanyChapter 3 Assignment
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 (EBIT).
The company's operating costs (excluding depreciation and amortization) remain at 75% of net sales, and its depreciation and
amortization expenses remain constant from year to year.
The company's tax rate remains constant at 25% of its pre-tax income or earnings before taxes (EBT).
In Year 2, Blue Hamster expects to pay $100,000 and $1,520,039 of preferred and common stock dividends, respectively.
Complete the Year 2 income statement data for Blue Hamster, then answer the questions that follow. Be sure to round each dollar value to the
nearest whole dollar.
Blue Hamster Manufacturing Inc.
Income Statement for Year Ending December 31
Income Statement for Year Ending December 31
Given the results of the previous income statement calculations, complete the following statements:
In Year 2, if Cute Camel has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive
In annual dividends.
If Cute Camel has 400,000 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.
Cute Camel's earnings before interest, taxes, depreciation and amortization (EBITDA) value changed from
in Year 2.
It is
to say that Cute Camel'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, $1,479,500 and $1,822,062, respectively. This is because
of the items reported in the income
statement involve payments and receipts of cash.
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