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Use the information given in the income statement to answer the question that follows. Cute Camel Woodcraft Company Income Statement Years Ending December 31 Year
Use the information given in the income statement to answer the question that follows.
Cute Camel Woodcraft Company | ||
---|---|---|
Income Statement | ||
Years Ending December 31 | ||
Year 2 (Forecasted) | Year 1 | |
Net sales | 18,750,000 | $15,000,000 |
Fixed operating costs, except depreciation and amortization | (11,250,000) | (9,000,000) |
Depreciation and amortization expenses | (600,000) | (600,000) |
Net operating income (or EBIT) | 6,900,000 | $5,400,000 |
Interest | (1,035,000) | (540,000) |
Earnings before taxes (or EBT) | 5,865,000 | $4,860,000 |
Taxes (40%) | (2,346,000) | (1,944,000) |
Net Income | 3,519,000 | $2,916,000 |
Preferred dividends | (200,000) | (200,000) |
Earnings available to common stockholders (EAC) | 3,319,000 | $2,716,000 |
Common dividends | (1,055,700) | (874,800) |
Addition to retained earnings | $2,263,300 | $1,841,200 |
If Cute Camel has 400,000 shares of common stock issued and outstanding, then the firms earnings per share (EPS) is expected to change from __________ in Year 1 to ____________ in Year 2.
Options for Year 1
$6.79
7.29
13.50
12.15
Options for Year 2
17.25
8.30
8.80
14.66
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