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    Projected net income/dividends

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    Austin Grocers recently reported the following income statement (in millions of dollars):

    Sales $700
    Operating costs 500
    EBIT $200
    Interest 40
    EBT $160
    Taxes (40%) 64
    Net income $ 96
    ------
    Dividends $ 32
    Addition to retained $ 64
    earnings

    This year the company is forecasting a 25% increase in sales, and it expects that its year-end operating costs 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 2003 net income?
    b.) What is the expected growth rate in Austin's dividends?

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    https://brainmass.com/business/income-statement/173240

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    Austin Grocers recently reported the following income statement (in millions of dollars):

    Sales $700
    Operating costs 500
    EBIT $200
    Interest 40
    EBT $160
    Taxes (40%) 64
    Net income $ 96
    ------
    Dividends $ 32
    Addition to retained $ 64
    ...

    Solution Summary

    The solution explains how to determine the projected net income and the growth rate in dividends

    $2.19

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