Construct a pro forma income statement for the first year

Reference no: EM13274805

Construct a pro forma income statement for the first year and second year for the following assumptions: • Units of Sales in Year 1: 110,000 • Price per Unit: $11 • Variable cost per unit: 30% • Fixed Costs: $125,000 • Income taxes: 15% • Interest Expense: $200,000 • In year 2, Price per unit increases to $11.50, and unit of sales increases by 5%, all other assumptions remain the same. Calculate the sustainable growth based on the following information: D= 30% ROE = 25% Calculate a table of interest rates for 5 years based on the following information: • The pure interest rate is 2% • Inflation expectations for year 1 = 3%, year 2 =4%, years 3-5 =5% • The default risk is .1% for year one and increases by .1% over each year • Liquidity premium is 0 for year 1 and increases by .2% each year • Maturity risk premium is 0 for years 1 and 2 and .3% for years 3-5.

Reference no: EM13274805

Questions Cloud

What was the amount of the last annual dividend : A stock is selling for $12.10 a share given a market return of 15.00 percent and a capital gains yield of 5.40 percent. What was the amount of the last annual dividend that was paid?

Design a circuit which accepts 2-bits input duty : Connect the PWM output to an LED, for preliminary testing with slow clock frequency, then to the oscilloscope to show final results with multiple frequencies between 10 KHz to 1MHz. In the final demonstration, connect CLK to CH1, and PWM to CH2

Determine the internal energy of the gas : Suppose that 2.8 moles of an ideal diatomic gas has a temperature of 1003 K, and that each molecule has a mass 2.32 Ã* 10^-26 kg, What is the internal energy of the gas

What is one share of this stock worth to you today : The James Clothing Co. pays a constant annual dividend of $3.90 per share. What is one share of this stock worth to you today if you require a 26 percent rate of return.

Construct a pro forma income statement for the first year : Construct a pro forma income statement for the first year and second year for the following assumptions: • Units of Sales in Year 1: 110,000 • Price per Unit: $11.

What should the cross-sectional area of the steel rod : Assume that you need to transfer 4689860 J of energy in ten minutes between the two reservoirs. What should the cross-sectional area of the steel rod

How to write the boolean equation for emergency : A jet has 4 engines, A and B on the left wing, C and D on the right wing. Each engine gives a FAIL signal which is TRUE if the engine is broken, and is FALSE if the engine is working fine. The plane can fly as long as at most 1 engine on each wing..

What is the american quote based on this information : Assume a pair of Nike athletic shoes costs $95.00 (USD), but since you are a Japanese consumer, you can purchase it for 9,690 Yen. What is the American quote based on this information?

Who will be responsible for the different elements : Discuss your budget and timetable and provide a schedule for the implementation of the plan. Identify, by title, who will be responsible for the different elements of the marketing plan and why.

User Account

All Pages