Sunmart Inc. is a discount retailer with 1,000 stores located across North America. Sunmart purchases bulk quantities of groceries and household goods, and then sells the goods directly to retail customers at a markup. Pharmedical Inc. is a pharmaceutical company that develops medications to prevent and treat diseases. Pharmedical develops, produces, and markets medications for purchase by patients of health care professionals and customers of retail pharmacies and stores. Referring to each company's business model, answer the following:

(a)Which

company would have a higher gross profit percentage?

Pharmedical Inc.

Either

Sunmart Inc. or Pharmedical Inc.

Neither

Sunmart Inc. nor Pharmedical Inc.

Sunmart

Inc.

would

have a higher gross profit percentage.

(b) Which company would have a higher selling expense as a percentage

of sales?

Neither Sunmart Inc. nor Pharmedical Inc.

Pharmedical Inc.

Either

Sunmart Inc. or Pharmedical Inc.

Sunmart

Inc.

would

have a higher selling expense as a percentage of sales.

(c)Which

company would have a higher research and development expense as a percentage of

sales?

Pharmedical Inc.

Sunmart Inc.

Either

Sunmart Inc. or Pharmedical Inc.

Neither

Sunmart Inc. nor Pharmedical Inc.

would

have a higher research and development expense as a percentage of sales.

(d)Which

company would have higher net income?

Sunmart Inc.

Neither Sunmart Inc. nor Pharmedical Inc.

Pharmedical

Inc.

Either

Sunmart Inc. or Pharmedical Inc.

may

have higher net income.