In the year just ended, Callaway Lighting had sales of and incurred cost of goods sold equal to . The firm's operating expenses were and its increase in retained earnings was for the year. There are currently common stock shares outstanding and the firm pays a dividend per share. The firm has in interest-bearing debt on which it pays percent interest.

a.Assuming the firm's earnings are taxed at percent, construct the firm's income statement.

b.Calculate the firm's operating profit margin and net profit margin.

c.Compute the times interest earned ratio. What does this ratio tell you about Callaway's ability to pay its interest expense?

d.What is the firm's