Part 1. Given the following:

Initial Markup

65%

Total Cost of Goods Sold

55%

Average Inventory at Cost

$360,000

Gross Sales

$3,200,000

Reductions

$400,000

Variable Expenses

Fixed Expenses

$300,000

$300,000

Total Assets

$2,800,000

Net Worth [Owner's or Shareholder's Equity]

$900,000

Create a Strategic Profit Model. Calculate each of the following and comment on what these results mean. Show all calculations.