Use Segment Disclosures to Forecast Income Statement Following are revenue and cost of revenue numbers for Thermo Fisher Scientific. THERMO FISHER SCIENTIFIC INC. Consolidated Statement of Income For Year Ended December 31 ($ millions) Revenues 2018 2017 Product revenues Service revenues $18,868 $17,374 5,490 3,544 24,358 20,918 8,975 2,495 9,682 3,819 13,501 6,057 967 11,470 5,504 887 Total revenues Costs and operating expenses Product cost of revenues Service cost of revenues Total cost of revenues Selling, general and administrative expenses Research and development expenses Restructuring and other costs, net Total costs and operating expenses Operating income Other expense, net Income from continuing operations before income taxes Income tax expense Income from continuing operations Loss from discontinued operations 50 20,575 3,783 (521) 97 17,958 2,960 (531) 2,429 3,262 324 201 2,938 2,228 0 (3) Net income $2,938 $2,225 Required a. Use the historic growth in total revenues (from 2017 to 2018) to forecast total revenue for 2019. Use the historic rate of total cost of revenues to total revenues to forecast total cost of revenues. Other forecast assumptions follow: Selling, general and administrative expenses 24.9% of total revenues Research and development expenses 4.0% of total revenues Restructuring and other costs, net $0 Other expense, net No Change Income tax expense 23% of pretax income Rounding instructions: Round growth rate factors for revenue accounts to three decimal places (for example, 1.034555 = 1.035) or one decimal place as a percentage (1.034555 = 103.5%). Round rate of cost factors to one decimal place, as a percentage (for example, 0.634555 = 63.5%). Round your final answers below to the nearest whole dollar. Thermo Fisher Scientific Forecasted Income Statement Dec. 31, 2019 Forecast Product Revenues $ 22,399 x 4,950 x Service Revenues Total Revenues 31,202 x Total cost of revenue 0 x 0 x 0 x 0 Selling, general and administrative expenses Research and development expenses Restructuring and other costs, net Total costs and operating expenses Operating Income Other Expense, Net Income from Continuing Operations Before Income Taxes 0 % 0 x 0 x 0 x Income tax expense 0 x Net Income $ 0 x b. Refine your forecast by using the separate historic growth in product revenues and service revenues (from 2017 to 2018) to estimate 2019 product and service revenues respectively for 2019. Also, use the historic growth in cost of revenues for each segment to forecast separate segment cost of revenues. Assume other forecast assumptions are as in part a. Rounding instructions: Round growth rate factors for revenue accounts to three decimal places (for example, 1.034555 = 1.035) or one decimal place as a percentage (1.034555 = 103.5%). Round rate of cost factors to one decimal place, as a percentage (for example, 0.634555 = 63.5%). Round your final answers below to the nearest whole dollar. Thermo Fisher Scientific Forecasted Income Statement Dec. 31, 2019 Forecast Revenues $ 22.399 X OX OX OX OX OX OX Product Revenues Service Revenues Total Revenues Product Cost of revenues Service Cost of revenues Total cost of revenue Selling, general and administrative expenses Research and development expenses Restructuring and other costs, net Total costs and operating expenses Operating Income Other Expense, Net Income from Continuing Operations Before Income Taxes Income tax expense Net Income OX 0 OX 0 x OX OX G OX OX