Question
2007 income statement (in millions): Sales 132,540 Cost of goods sold 55,667 Gross profit 76,873 Selling, general and administrative 31,810 R&D expenses 9,278 Restructuring charge
2007 income statement (in millions): Sales 132,540 Cost of goods sold 55,667 Gross profit 76,873 Selling, general and administrative 31,810 R&D expenses 9,278 Restructuring charge 4,443 Litigation settlement 14,590 Other expenses, net 6,557 Total expenses 66,677 Operating profit 10,196 Other expense (income) Interest expense 5,589 Gain on sale of long-term investments (5,449) Income before taxes 10,056 Provision for income tax 4,626 Effect of change in accounting principle 6,320 Net loss (890) Footnotes: Restructuring charges include accruals for severance packages and losses on asset write-downs. The company does not anticipate further restructuring activity. A lawsuit related to product malfunctions was settled, and ongoing lawsuits will not materially affect future income. Changes to the company's pension plan resulted in a one-time gain. Securities were sold during the year to fund the litigation settlement. Tax-law changes resulted in the non-deductibility of certain expenses. The company anticipates a 35% tax rate for 2008 and onward. Calculate persistent net income (or loss) for 2007.
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