Refer to the financial statement data of ABEX Chemicals, Inc., reproduced in Case 105. Required: a. Prepare a forecast of
Refer to the financial statement data of ABEX Chemicals, Inc., reproduced in Case 10–5.
a. Prepare a forecast of ABEX’s total operating income for Year 10. (Hint: Refer to forecast data for volume, price, and cost.)
b. Identify additional information necessary to prepare a forecast of earnings per share (EPS) for Year 10, and identify five primary sources where you can obtain this information (you should identify primary sources and not necessarily external sources for the information needed).
c. Forecast and explain incremental changes in ABEX’s earnings per share based on each of the following two independent scenarios for the petrochemical division only.
(1) Price of polyethylene in Year 10 is 8% higher than shown in the selected key statistics.
(2) Volume of production and sales of polyethylene is 8% higher than shown in the selected key statistics.
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