Anthony Gray has been interested in music since he was old enough to sit at the piano.He literally grew up with music, and he used his talent to earn his way through college.Anthony has grown tired of his job at a large music house in Houston and is seriouslyconsidering moving back to his hometown in Massachusetts to open his own smallmusic shop. In researching this venture, Anthony notices that he must include aprojected income statement in his loan application. Use the following statistics from Robert Morris Associates' Annual Statement Studies to answer the following question(s).

Net Sales 100.0 percent

Cost of Sales 59.9 percent

Gross Profit 40.1 percent

Operating Expenses 31.2 percent

Net Profit (Before Taxes) 8.9 percent

1. Suppose that a market survey indicates that Anthony's proposed business is likely togenerate only $190,000 in sales. What net profit should Anthony expect to earn?

2. What sales level would Anthony need to reach in order to earn $75,000 in profit?

3. Suppose Anthonys sales were $1,000,000. What is his gross profit level, given the information above?