14 marks Recast the year A I/s into the contribution margin [CM] format. Suppose sales are expected to decline by 10% next year (Year A is the current year). (i) Calculate OLE and TLE for Year A, the current year. (ii) Using OLE, what NOPAT should the company expect next year? Using TLE, what NI should the company expect next year? (ii) Now prepare the 1/S for next year using the CM format b. 12 marks Recast the year B I1/S into the contribution margin [CM] format. Suppose sales are expected to increase by 10% next year (Year B is the current year). (i) Calculate OLE and TLE for Year B, the current year. (ii) Using OLE, what NOPAT should the company expect next year? Using TLE, what NI should the company expect next year? (i) Now prepare the 1/S for next year using the CM format Year A Year B Sales $120,000 $150,000 CGS 80,000 90,000 60,000 42,500 GP 40,000 OPE 30,000 BIT 10,000 17,500 Interest 2,000 2,000 8,000 3,200 EBT 15,500 Tax(40%) 6,200 $ 4,800 $ 9,300 NI 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] (4 marks) $110,000 $132,500 150,000 TC Sales 120,000