DEF Ltd. provided the following financial information for 2023:

• Net Sales: $900,000
• Cost of Goods Sold: $600,000
• Administrative Expenses: $100,000
• Selling Expenses: $80,000
• Interest Expense: $25,000
• Tax Expense: $35,000

Requirements:

1. Construct the income statement.
2. Compute the gross profit margin.
3. Compute the operating profit margin.
4. Compute the net profit margin.
5. Evaluate the effect of a 20% increase in administrative expenses on the net profit margin.