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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
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?
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