GHI Manufacturing Financial Data:

• Total Revenue: $700,000
• Sales Discounts: $15,000
• Returns and Allowances: $10,000
• Net Sales: $675,000
• Cost of Goods Sold: $350,000
• Operating Expenses: $150,000
• Interest Expense: $7,000
• Tax Rate: 32%

Requirements:

1. Prepare an income statement.
2. Calculate the net profit margin.
3. Determine the amount of taxes paid.
4. Analyze how a 10% increase in sales discounts would affect net income.
5. Discuss the impact of interest expense on the overall profitability.