The income statement, also known as the profit and loss statement, helps calculate the firm's net income that is available to shareholders. The income statement is usually prepared using the International Financial Reporting Standards (IFRS), which match revenues and expenses to the period in which they were incurred, not necessarily when cash was received or paid. The following is the income statement of Universal Chemical Corp. in its first year of operation: The firm's CEO would like sales to increase by 25% next year. Assume that (1) the operating costs (excluding depreciation and amortization) remain at 80% of sales, (2) depreciation and amortization remain at 4% of sales, and (3) the interest cost increases from 10% to 15% of earnings before interest and taxes (EBIT). The tax rate of 40% the interest cost increases from 10% to 15% of earnings before interest and taxes (EBIT). The tax rate of 40% also remains the same. What will be the company's operating income in the second year? $700 million According to the income statement given, Universal Chemical Corp.'s earnings before interest, taxes, depreciation, and amortization (EBITDA) was $700 million in the first year. Suppose the government considers a provision that will require firms to depreciate their assets over a longer period of time. This provision will decrease the firm's annual depreciation expense but will have no effect on its sales revenue or tax rates. If the provision passes, which of the following statements will be correct? Check all that apply. Universal Chemical Corp. will have a lower net income. Universal Chemical Corp.'s operating income will increase. Universal Chemical Corp. will pay more in taxes. Universal Chemical Corp.'s EBITDA will remain unchanged. Universal Chemical Corp.'s operating income will decrease