Use the Pro forma below, fill in the needed line items and answer these questions.

Operating Profit Depreciation & Amortization

Interest Expense

Eamings before Tax

Taxes

Net Income

Question

$29$

$30$

$31$

Year

Given

Given

Given

Calculate

$45\%$

Calculate

Calculate

Students are to calculate Lines $13,15$ and $17$

Point Value

Glven the pro forma income statement, calculate the Net Income for Each year

What is the Net Income for year $3?$

$4$ What is the amount of taxes paid in year $1?$

$4$ Use sensitivity analysis to calculate the amount of tax savings realized in year $2$ due to Depreciation and amortization.

What is the amount of taxes saved in your $2$ due to Depreciation and Amortization?

How would operating profit change in year $2$

$($dollars only$)$ if the company had no long term debt in yr $2?$