For the base case in this section, as a percentage of sales, COGS = 72 percent, SGA = 15 percent, R&D = 2.5 percent. Depreciation, Interest expense are fixed as stated. Tax Rate is 20 percent.

Given the following case, calculate the independent effects of a 1 percent increase in Gross Margin, a 1 percent decrease in the TaxRate, and a 5 percent increase in Sales. Using the same case, calculate the independent effects of a 2 percent increase in Gross Margin, a 2 percent decrease in the Tax Rate, and a 5 percent decrease in Sales