Flingen Inc. reveals the following information in their annual report for FY 2017

Upper management plans to cut cost of goods sold by 8% for the coming year but retain the same sales. What is the profit margin estimated to be for 2018?

Selected Income Statement Items: Sales Cost of goods sold Pretax earnings $9,000,000 $5,000,000 $500,000 Selected Balance Sheet Items: Merchandise inventory Total assets $80,000 $2,000,000