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