Question
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
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 _____%.
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