Little Gorilla, Inc. Year 2 Income Statement (S in million) Sales $9,625 Less: Cost of goods sold 5,225 Less: Depreciation 1.890 Eamings Before interest and taxes 2,510 Less: Interest paid 850 Taxable income 1,660 Less: Taxes 581 Net income $1.079 Dividends paid 400 Addition to retained earnings $679 Year 1 and Year 2 Balance Sheet (S in million) Year 1 Year 2 Year 1 Year 2 Cash $1,455 $260 Accounts payable $1,150 $2,863 Accounts rec. 2,460 3,975 Notes payable 2.600 1.628 Inventory 1.405 885 Total $3,750 $4,491 Total $5,320 $5,120 Long-term debt 7,000 7,600 Net fixed assets 19.300 21.720 Common stock 5,500 5,700 Retained earnings 8.370 9.049 Total liabilities Total assets $24.620 $26,840 and Equity $24.620 $26.840 Accounts rec.: Accounts receivables What is the profit margin for Year 2? A) 0.26 B) 0.04 C) 0.07 D) 0.11