Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Local Co. has sales of $ 10.0 million and cost of sales of $ 6.0 million. Its selling, general and administrative expenses are$ 500,000 and

Local Co. has sales of $ 10.0 million and cost of sales of $ 6.0 million. Its selling, general and administrative expenses are$ 500,000 and its research and development is $ 1.0 million. It has annual depreciation charges of $ 1.0 million and a tax rate of 35 %. Local's gross margin is 40.00%, its operating margin is 15.00%, and its net profit margin is 9.75%. If Local Co. had interest expense of $ 800,000, how would that affect each of its margins?

Local's new gross margin is ___%,

new operating margin is ___%,

and new net profit margin is ___%.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Micro Entrepreneurship And Micro Enterprise Development In Malaysia Emerging Research And Opportunities

Authors: Abdullah Al Mamun , Mohammad Nurul Huda Mazumder, Noor Raihani Zainol, Rajennd Muniady

1st Edition

1522584730,1522584757

More Books

Students also viewed these Finance questions