Consider the nllo’wing scenario: Blue Hamster Manufacturing In|:’s inoome statement reporls dale Jrils rst year oF operation. The rm’s CEEI would…

1.In Year 2, if Blue Hamster has 5,000 shares of preferred stock issued and outstanding, then each preferred share should expect to receive in annual dividends.•

2.If Blue Hamster has 400,000 shares of common stock issued and outstanding, then the firm’s earnings per share (EPS) is expected to change from in Year 1 to in Year 3..•Blue Hamster’s before interest, taxes, depreciation and amortization (EBITDA) value changed from in Year 1 to in Year 2.•

4.It is to say that Blue Hamster’s net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company’s annual contribution to retained earnings, $2,143,600 and $2,638,150, respectively. This is because of the item reported in the income statement involve payments and receipts of cash.

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