Question: Analysis on whether the US deal should be accepted. Sales Cost of sales Gross profit Appendix I Atlantic Watercraft Ltd. Statement of profit or loss
Analysis on whether the US deal should be accepted.
Sales Cost of sales Gross profit Appendix I Atlantic Watercraft Ltd. Statement of profit or loss As at September 30 (in '000s) Selling and administrative expenses Profit before income taxes Income taxes (Note 2) Net profit (Note 1) $ 19,826 15,857 2021 (unaudited) 2020 (unaudited) $ 15,252 12,939 3,969 2,313 2,194 1,616 1,775 697 530 210 (Note 3) $ 1.245 $ 487 Note 1: AWL offers a full line of fibreglass powerboats, ranging in length from 14 to 30 feet. The fiscal 2021 sales and variable costs breakdown is as follows: Boat length 14'-16' 17'-18' 18'-30' Total Units Sales (in '000s) Variable costs (in '000s) 1,180 465 $ 10,637 5,081 $ 8,751 3,811 130 4,108 3,492 1,775 $19,826 $16,054 Selling prices are expected to increase by 1% per year for the next five years. Note 2: AWL's income tax rate is approximately 30%. Note 3: Assume cash flows occur evenly throughout the year.
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