Question
Kenney Corporation recently reported the following income statement for 2004(numbers are in millions of dollars): The company forecasts that its sales will increase by 10
Kenney Corporation recently reported the following income statement for 2004(numbers are in millions of dollars):
The company forecasts that its sales will increase by 10 percent in 2005 and its operating costs will increase in proportion to sales. The company's interest expense is expected to remain at $200 million, and the tax rate will remain at 40 percent. The company plans to pay out 60 percent of its net income as dividends, the other 40 percent will be additions to retained earnings. What is the forecasted addition to retained earnings for 2005?
Thanks
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