The income statement is prepared using the generally accepted accounting principles (GAAP) that match the firm's revenues and expenses to the period in which they were incurred, not necessarily when cash was received or paid. Investors and analysts use the information given in the income statement and other financial statements and reports to evaluate the company's financial performance and condition. Consider the following scenario Blue Hamster Manufacturing Inc.'s income statement reports data for its first year of operation. The firm's CEO would like sales to increase by 25% next year 1. Blue Hamster is able to achieve this level of increased sales, but its interest costs increase from 10% to 15% of eamings before interest and taxes (EBIT) 2. The company's operating costs (excluding depreciation and amortization) remain at 80% of net sales, and its depreciation and amortization expenses remain constant from year to year 3. The company's tax rate remains constant at 40% of its pre-tax income or eamings before taxes (EBT). 4. In Year 2, Blue Hamster expects to pay $100,000 and $856,800 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 Year 2 (Forecasted) Year 1 $20,000,000 16,000,000 800,000 $3,200,000 320,000 2,880,000 1,152,000 $1,728,000 100,000 1,628,000 691,200 $936,800 $25,000,000 17,000,000 800,000 $7,200,000 Net sales Less: Operating costs, except depreciation and amortization Less: Depreciation and amortization expenses Operating income (or EBIT) Less: Interest expense Pre-tax income (or EBT) Less: Taxes (40%) Earnings after taxes Less: Preferred stock dividends Earnings available to common shareholders Less: Common stock dividends Contribution to retained eamings $1,185,200 Given the results of the previous income statement calculations, complete the following statements: . In Year 2, if Blue Hamster has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive 550.00 in annual dividends. .If Blue Hamster has 400,000 shares of common stock issued and outstanding, then the firm's eamings per share (EPS) is expected to change from in Year 1 to in Year 2. .Blue Hamster's before interest, taxes, depreciation and amortization (EBITDA) value changed from in Year 1 to in Year 2. .It is correctto say that Blue Hamster's net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company's annual of the item reported in the income contribution to retained eamings, $936,800 and $1,185,200, respectively. This is because statement involv e payments and receipts of cash