Pharoah Department Store is located in midtown Metropolis. During the past several years, net income has been declining because suburban shopping centers have been attracting business away from city areas. At the end of the company's fiscal year on November 30, 2022, these accounts appeared in its adjusted trial balance. Accounts Payable $ 55,000 Accounts Receivable 35,800 Accumulated Depreciation - Equipment 142,800 Cash 16,800 Common Stock 73,500 Cost of Goods Sold 1.280,640 Freight Out 13.570 Equipment 333,890 Depreciation Expense 29.100 Dividends 25.200 4.200 Gain on Disposal of Plant Assets Income Tax Expense 21,000 Insurance Expense 18.900 Interest Expense 10.500 Inventory 54700 Notes Payable 91.350 Prepaid Insurance 12,600 Advertising Expense 70,350 Rent Expense 71,400 29,500 Retained Earnings 249,200 Salaries and Wages Expense 1,898,000 Sales Revenue 12,600 Salaries and Wages Payable 42,000 Sales Returns and Allowances Utilities Expense 21.300 The vice president of marketing and the director of human resources have developed a proposal whereby the company would compensate the sales force on a strictly commission basis. Given the increased incentive, they expect net sales to increase by 15%. As a result, they estimate that gross profit will increase by $86,304 and expenses by $117,856. Compute the expected new net income. (Hint: You do not need to prepare an income statement.) Then, compute the revised profit margin and gross proftrate. Comment on the effect that this plan would have on net income and on the ratios, and evaluate the merit of this proposal (ignore income tax effects.) Revised net income Revised profit margin (Round to 1 decimal place, es. 15.2%) % Revised gross profit rate (Round to 1 decimal place, eg. 15.2%)