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Sunny Corporation reported the following income statement for the most recent year (numbers are in millions of dollars): Sales $9,000 Total operating costs 3.000 EBIT
Sunny Corporation reported the following income statement for the most recent year (numbers are in millions of dollars): Sales $9,000 Total operating costs 3.000 EBIT $ 6,000 Interest 200 $5,800 Earnings before tax (EBT) Taxes (40%) Net income available to 2.320 common shareholders $3,480 The company forecasts that its sales will increase by 10 percent in the next year 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 is 40 percent. The company plans to pay out 30 percent of its net income as dividends. What is the forecasted addition to retained earnings for the next year? $1,520 $4,688 $1,152 $3,840 $2,688
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