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Data for STU Enterprises: Total Revenue : $1,200,000 Sales Discounts : $25,000 Returns and Allowances : $20,000 Net Sales : $1,155,000 Cost of Goods Sold

Data for STU Enterprises:

  • Total Revenue: $1,200,000
  • Sales Discounts: $25,000
  • Returns and Allowances: $20,000
  • Net Sales: $1,155,000
  • Cost of Goods Sold: $600,000
  • Operating Expenses: $300,000
  • Interest Expense: $15,000
  • Tax Rate: 30%

Requirements:

  1. Prepare an income statement.
  2. Calculate the net profit margin.
  3. Determine the amount of taxes paid.
  4. Analyze how a 5% increase in cost of goods sold would affect net income.
  5. Discuss the role of interest expense in profitability.

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