Part I1 - Problem Solving 1. (a-14 Points, b-2 Points) - a.) Use the following information to determine various Income and Earnings Per Share numbers for Company A for the year ending 2017 (show work): $110,000,000 Revenue Gross Margin - 55% SG&A R&D 20% of Revenue $15,000,000 Capital Equipment, net (12/31/17) S50,000,000 All Capital Equipment was purchased on January 1, 2017 for $55 million and depreciated over 10 years using the straight line method ($5 million salvage value). Prior to that the company had no Property Plant& Equipment) Total Debt Outstanding-55,000,000 Bond with 10% annual Interest only payment until 2027 Average Cash Balance of $100 million during the year yields an average 2% return (interest income) . Tax rate (35%) Hint: use this table as a guide to form an income statement Shares outstanding - 10,000,000 Current stock Price $10.00 Warrants outstanding: G Profit RD $3.00 $9.00 Class A -2,000,000 Currently exercisable at Class B -1,000,000 Currently exercisable at Operating Profit/Income (1 point) Pre-Tax Income (1 point) Net Income (1 point) EPS - Basic (I point) EPS - Diluted (8 points) Diluted Shares used to calculate Diluted EPS (2 points) DA Op Pron GP.CE-op Interest hcome nterest Expense E Pre-Tax Income OP IN-PT EPS Shures ostavding SO b.) Of the following four industry groups, which one does company A most likely belong to A.) Pharmaceuticals and Drugs B.) Department Stores C.) Home cleaning services D.) Hotels