Dr. Zhivago Diagnostics Corp.'s income statement for 2013 is as follows:

Sales	$	2,750,000
Cost of goods sold		1,450,000
Gross profit	$	1,300,000
Selling and administrative expense		377,000
Operating profit	$	923,000
Interest expense		57,600
Income before taxes	$	865,400
Taxes (30%)		259,620
Income after taxes	$	605,780

a.	Compute the profit margin for 2013. (Input the profit margin as a percent rounded to 2 decimal places.)

Profit margin

%

b.

Assume in 2014, sales increase by 10 percent and cost of goods sold increases by 20 percent. The firm is able to keep all other expenses the same. Once again, assume a tax rate of 30 percent on income before taxes. What is income after taxes and the profit margin for 2014? (Input the profit margin as a percent rounded to 2 decimal places.)

	2014
Income after taxes	$
Profit margin