STV Limited provided the following for 2023:

• Net Sales: $700,000
• Cost of Goods Sold: $400,000
• Administrative Expenses: $120,000
• Selling Expenses: $90,000
• Interest Expense: $30,000
• Tax Expense: $35,000

Requirements:

1. Construct the income statement.
2. Compute the gross profit margin.
3. Compute the operating profit margin.
4. Compute the net profit margin.
5. Evaluate the impact of a 20% increase in selling expenses on the net profit margin.