Question: PRO FORMA INCOME STATEMENT. Austin grocery recently reported the following 2011 income statement in millions of dollars

Sales $700

operating costs including depreciation 500

ebit $200

interest 40

ebt $160

taxes 40% 64

net income $96

dividends $32

addition to retained earnings $64

for the coming year, the company is forecasting a 25% 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 2012 income?

B. What is the expected growth rate in Austin’s dividends?