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Mainline Clinic, a for-profit business, had revenues of $13.1 million last year. Expenses other than depreciation totaled 66 percent of revenues, and depreciation expense was
Mainline Clinic, a for-profit business, had revenues of $13.1 million last year. Expenses other than depreciation totaled 66 percent of revenues, and depreciation expense was $2 million. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash. Mainline must pay taxes at a rate of 31 percent of pretax (operating) income. Now, suppose the company changed its depreciation calculation procedures (still within GAAP) such that its depreciation expense was halved. How would this change affect Mainline's profit margin? If profit margin would go down, enter the amount of the change as a negative number. If profit margin would go up, enter the amount of the change as a positive number. Enter your answer as a percent, rounded to one decimal place. Omit the "%" sign. For example, if the answer is 12.34%, enter as 12.3. If the answer is negative, place a minus sign (-) before the answer. Mainline Clinic, a for-profit business, had revenues of $13.1 million last year. Expenses other than depreciation totaled 66 percent of revenues, and depreciation expense was $2 million. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash. Mainline must pay taxes at a rate of 31 percent of pretax (operating) income. Now, suppose the company changed its depreciation calculation procedures (still within GAAP) such that its depreciation expense was halved. How would this change affect Mainline's profit margin? If profit margin would go down, enter the amount of the change as a negative number. If profit margin would go up, enter the amount of the change as a positive number. Enter your answer as a percent, rounded to one decimal place. Omit the "%" sign. For example, if the answer is 12.34%, enter as 12.3. If the answer is negative, place a minus sign (-) before the
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