ICS Manufacturing Company produces plastic parts for the automotive industry. Here is their Income Statement for 2015

ICS Manufacturing Company

Income Statement for 2015

Sales Revenue $35,500,000

Cost of Goods Sold 12,725,000

Selling, General & Admin Exp 11,200,000

Depreciation Expense 3,200,000

EBIT 8,375,000

Interest Expense 350,000

Taxable Income 8,025,000

Taxes 3,210,000

Net Income 4,815,000

ICS Manufacturing Company

Income Statement for 2016

Sales Revenue $37,346,000

Cost of Goods Sold 13,297,625

Selling, General & Admin Exp 11,625,600

Depreciation Expense 3,255,000

EBIT 9,167,775

Interest Expense 375,000

Taxable Income 8,792,775

Taxes 3,517,110

Net Income 5,275,665

Using the 2015 and 2016 financials for ICS, complete the following show calculations and/or numbers you used to derive your answer:

1. ICS wants to take around $400,000 of its cash and invest in marketable securities. They anticipate receiving around $7.5% interest on their investment and would like to have it held for 10 years. What will be the FV of this $400,000 investment?

2. ICS believes they will only gain a 6% return on their $400,000 investment. Using the Rule of 72, how many years will it take to double their investment?