1. If the Singapore dollar appreciates against the U.S. dollar over this year, the consolidated earnings of a U.S. company with a subsidiary in Singapore will be ____ as a result of the exchange rate movement.
a- negative
b- adversely affected
c - favorably affected
d- unaffected
2. XYZ Company has sales of $4,800,000, COGS is 40% of sales, operating expenses are $2,100,000, interest expense $20,000 and depreciation 30,000. Tax rate 40%.
They expect to increase sales by 6% next year. Complete a proforma income statement with COGS and operating expenses increasing at the 6%, interest expense stays the same and depreciation stay the same. What is their EAT, earnings after tax?
451,440
463,440
475,440
466,080