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Question Sales CGS Year A $120,000 80,000 Year B $150,000 90,000 GP 40,000 35,000...

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Question Sales CGS Year A $120,000 80,000 Year B $150,000 90,000 GP 40,000 35,000 60,000 47,500 OPE EBIT Interest 5,000 4,000 12,500 4,000 EBT Tax(40%) 1,000 400 8,500 3,400 NI $ 600 $ 5,1004 Let TC (total op. cost) = CGS + OPE (operating cost). Then TC = Fixed + v*Sales Determine the parameters, fixed and v. [That is, estimate the underlying linear function] TC $115,000 $137,500 Sales 120,000 150,000 Recast the year A I/S into the contribution margin (CM) format. a. 25 marks Suppose sales are expected to decline by 10% next year (Year A is the current year). What NOPAT should the company expect next year? What about NI?- b. 25 marks Recast the year B I/S into the contribution margin (CM) format. Suppose sales are expected to decline by 10% next year (Year B is the current year). What NOPAT should the company expect next year? What about NI

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