Austin Grocers recently reported the following 2016 income statement (in millions of dollars): Sales $700 Operating costs including depreciation EBIT Interest EBT Taxes (40%) Net income 500 $200 40 $160 64 $96 $37 564 Dividends Addition to retained earnings For the coming year, the company is forecasting a 35% increase in sales, and it expects that its year end operating costs, including depreciation, will equal 75% of sales. Austin's tax rate, interest expense, and dividend payout ratio are all expected to remain constant. a. What is Austin's projected 2017 net income? Enter your answer in millions. For example, an answer of $13,000,000 should be entered as 13. Round your answer to two decimal places million b. What is the expected growth rate in Austin's dividends? Do not round your intermediate calculations. Round your answer to two decimal places.

Austin Grocers recently reported the following 2016 income statement (in millions of dollars): Sales $700 Operating costs including depreciation EBIT Interest EBT Taxes (40%) Net income 500 $200 40 $160 64 $96 $37 564 Dividends Addition to retained earnings For the coming year, the company is forecasting a 35% increase in sales, and it expects that its year end operating costs, including depreciation, will equal 75% of sales. Austin's tax rate, interest expense, and dividend payout ratio are all expected to remain constant. a. What is Austin's projected 2017 net income? Enter your answer in millions. For example, an answer of $13,000,000 should be entered as 13. Round your answer to two decimal places million b. What is the expected growth rate in Austin's dividends? Do not round your intermediate calculations. Round your answer to two decimal places.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter12: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 6P

See similar textbooks

Similar questions

The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets (i.e., assets net of depreciation) by $270,000 per year for the next 4 years, and it forecasts that the ratio of revenues to total assets will remain at 1.50. Annual depreciation is 20% of net fixed assets at the beginning of the year. Fixed costs are expected to remain at $70 and variable costs at 70% of revenue. The company’s policy is to pay out one-half of net income as dividends and to maintain a book debt ratio of 20% of total capital. INCOME STATEMENT, 2019(Figures in $ thousands) Revenue $ 1,800 Fixed costs 70 Variable costs (70% of revenue) 1,260 Depreciation 216 Interest (6% of beginning-of-year debt) 18 Taxable income 236 Taxes (at 35%) 83 Net income $ 153 Dividends $ 77 Addition to retained…
At the end of last year, Roberts Inc. reported the followingincome statement (in millions of dollars): Looking ahead to the following year, the company’s CFO has assembled this information:● Year-end sales are expected to be 10% higher than the $3 billion in sales generatedlast year.● Year-end operating costs, excluding depreciation, are expected to equal 80% of yearendsales.● Depreciation is expected to increase at the same rate as sales.● Interest costs are expected to remain unchanged.● The tax rate is expected to remain at 40%.On the basis of that information, what will be the forecast for Roberts’ year-end net income?
Austin Grocers recently reported the following 2019 income statement (in millions of dollars): Sales $700 Operating costs including depreciation 500 ЕBIT $200 Interest 40 ЕВT $160 Taxes (25%) 40 Net income $120 Dividends $40 Addition to retained earnings $80 For the coming year, the company is forecasting a 30% increase in sales, and it expects that its year-end operating costs, including depreciation, will equal 70% of sales. Austin's tax rate, interest expense, and dividend payout ratio are all expected to remain constant. a. What is Austin's projected 2020 net income? Enter your answer in millions. For example, an answer of $13,000,000 should be entered as 13. Round your answer to two decimal places. 2$ million b. What is the expected growth rate in Austin's dividends? Do not round intermediate calculations. Round your answer to two decimal places. %
The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets (i.e., assets net of depreciation) by $270,000 per year for the next 4 years, and it forecasts that the ratio of revenues to total assets will remain at 1.50. Annual depreciation is 20% of net fixed assets at the beginning of the year. Fixed costs are expected to remain at $70 and variable costs at 70% of revenue. The company’s policy is to pay out one-half of net income as dividends and to maintain a book debt ratio of 20% of total capital. INCOME STATEMENT, 2019(Figures in $ thousands) Revenue $ 1,800 Fixed costs 70 Variable costs (70% of revenue) 1,260 Depreciation 216 Interest (6% of beginning-of-year debt) 18 Taxable income 236 Taxes (at 35%) 83 Net income $ 153 Dividends $ 77 Addition to retained…
Austin Grocers recently reported the following 2019 income statement (in millions of dollars): Sales $700 Operating costs including depreciation 500 EBIT $200 Interest 40 EBT $160 Taxes (25%) 40 Net income $120 Dividends $40 Addition to retained earnings $80 For the coming year, the company is forecasting a 35% increase in sales, and it expects that its year-end operating costs, including depreciation, will equal 75% of sales. Austin's tax rate, interest expense, and dividend payout ratio are all expected to remain constant. What is Austin's projected 2020 net income? Enter your answer in millions. For example, an answer of $13,000,000 should be entered as 13. Round your answer to two decimal places.I got 98.13 and it says its wrong What is the expected growth rate in Austin's dividends? Do not round intermediate calculations. Round your answer to two decimal places. I am completely lost on this one An excel walk through it perfered :)
The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets (i.e., assets net of depreciation) by $200,000 per year for the next 4 years, and it forecasts that the ratio of revenues to total assets will remain at 1.50. Annual depreciation is 20% of net fixed assets at the beginning of the year. Fixed costs are expected to remain at $90 and variable costs at 70% of revenue. The company’s policy is to pay out one-half of net income as dividends and to maintain a book debt ratio of 20% of total capital. INCOME STATEMENT, 2019(Figures in $ thousands) Revenue $ 1,800 Fixed costs 90 Variable costs (70% of revenue) 1,260 Depreciation 160 Interest (6% of beginning-of-year debt) 18 Taxable income 272 Taxes (at 35%) 95 Net income $ 177 Dividends $ 89 Addition to retained…
The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets (i.e., assets net of depreciation) by $240,000 per year for the next 5 years, and it forecasts that the ratio of revenues to total assets will remain at 1.50. Annual depreciation is 10% of net fixed assets at the beginning of the year. Fixed costs are expected to remain at $64 and variable costs at 80% of revenue. The company’s policy is to pay out two-thirds of net income as dividends and to maintain a book debt ratio of 20% of total capital. INCOME STATEMENT, 2019(Figures in $ thousands) Revenue $ 1,800 Fixed costs 64 Variable costs (80% of revenue) 1,440 Depreciation 96 Interest (8% of beginning-of-year debt) 24 Taxable income 176 Taxes (at 40%) 70 Net income $ 106 Dividends $ 71 Addition to…
The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets (i.e., assets net of depreciation) by $240,000 per year for the next 5 years, and it forecasts that the ratio of revenues to total assets will remain at 1.50. Annual depreciation is 10% of net fixed assets at the beginning of the year. Fixed costs are expected to remain at $64 and variable costs at 80% of revenue. The company’s policy is to pay out two-thirds of net income as dividends and to maintain a book debt ratio of 20% of total capital. INCOME STATEMENT, 2019(Figures in $ thousands) Revenue $ 1,800 Fixed costs 64 Variable costs (80% of revenue) 1,440 Depreciation 96 Interest (8% of beginning-of-year debt) 24 Taxable income 176 Taxes (at 40%) 70 Net income $ 106 Dividends $ 71 Addition to…
pharoah marble company has total assets of 13350000 sales of 18690000 and net income of 4672500. management expects sales to grow by 25% next year. all assets and costs (including taxes) vary directly with sales, and management expects to maintain a payout ratio of 65%. Calculate Pharoah's EFN.
The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets (i.e., assets net of depreciation) by $350,000 per year for the next 4 years, and it forecasts that the ratio of revenues to total assets will remain at 1.50. Annual depreciation is 20% of net fixed assets at the beginning of the year. Fixed costs are expected to remain at $86 and variable costs at 70% of revenue. The company’s policy is to pay out one-half of net income as dividends and to maintain a book debt ratio of 20% of total capital. INCOME STATEMENT, 2019(Figures in $ thousands) Revenue $ 2,160 Fixed costs 86 Variable costs (70% of revenue) 1,512 Depreciation 280 Interest (6% of beginning-of-year debt) 18 Taxable income 264 Taxes (at 35%) 92 Net income $ 172 Dividends $ 86 Addition to retained…
The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets (i.e., assets net of depreciation) by $400,000 per year for the next 5 years, and it forecasts that the ratio of revenues to total assets will remain at 1.50. Annual depreciation is 10% of net fixed assets at the beginning of the year. Fixed costs are expected to remain at $96 and variable costs at 80% of revenue. The company’s policy is to pay out two-thirds of net income as dividends and to maintain a book debt ratio of 20% of total capital. INCOME STATEMENT, 2019(Figures in $ thousands) Revenue $ 2,760 Fixed costs 96 Variable costs (80% of revenue) 2,208 Depreciation 160 Interest (8% of beginning-of-year debt) 40 Taxable income 256 Taxes (at 40%) 102 Net income $ 154 Dividends $ 103 Addition to…
Noah’s ark video games expects sales to grow by 25% next year. Assume that it pays out 95% of its net income. Using the following statements and the percent of sales method, forecast costs except depreciation