For PQR Corporation, the financial data is as follows:

• Total Sales: $1,000,000
• Sales Discounts: $50,000
• Sales Returns: $60,000
• Cost of Goods Sold: $400,000
• Operating Expenses: $200,000
• Interest Expense: $20,000
• Tax Rate: 30%

Requirements:

1. Draft an income statement.
2. Calculate the net profit margin.
3. Determine the tax expense.
4. Assess the impact of a 10% increase in sales on net income.
5. Discuss the role of operating expenses in determining profitability.