Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

a. What is Local's gross margin? b. What is Local's operating margin? c. What is Local's net profit margin? d. If Local Co. had an

image text in transcribed

a. What is Local's gross margin? b. What is Local's operating margin? c. What is Local's net profit margin? d. If Local Co. had an increase in selling expenses of $270,000, how would that affect each of its margins? e. If Local Co. had interest expense of $810,000, how would that affect each of its margins? a. What is Local's gross margin? Local's gross margin is %. (Round to one decimal place.) b. What is Local's operating margin? Local's operating margin is 6. (Round to one decimal place.) c. What is Local's net profit margin? Local's net profit margin is %. (Round to two decimal places.) d. If Local Co. had an increase in selling expenses of $270,000, how would that affect each of its margins? (Select the best choice below.) A. Selling expenses only affect the operating margin, but the increase in such expenses will not affect the other margins. B. Selling expenses do not affect the gross margin, but the increase in such expenses will decrease the other margins. C. Selling expenses only affect the net profit margin, but the increase in such expenses will not affect the other margins. D. Selling expenses only affect the gross margin, but the increase in such expenses will not affect the other margins. e. If Local Co.had interest expense of $810,000, how would that affect each of its margins? (Select the best choice below.) A. Only the net profit margin accounts for interest expense, so both the gross and operating margins will be unaffected. B. Only the operating margin accounts for interest expense, so both the gross and profit margins will be unaffected. C. Only the gross margin accounts for interest expense, so both the net profit and operating margins will be unaffected. D. Both the gross and operating margins will be affected, but the net profit margin will be unaffected

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Options Futures And Other Derivatives

Authors: John C. Hull

8th Edition

0132164949, 9780132164948

More Books

Students also viewed these Finance questions