Suppose RSM Publishing Co. has approached Bank of the Detroit and wants to borrow $250,000 in working capital. The firm provides the bank with the following financial statements: Sales: $4,622,800 COGs: $3,504,100 Operating expense: $893,000 Purchase: 3,116,000 Assets Liability & Equity Cash 50,000 A/P 166,000 A/R 375,000 Accrued Expense 37,000 Inventory 510,000 Notes payable (due in 18 months) 75,000 Fixed Asset 925,000 Current maturity of LT debt 25,000 Total Asset 1,860,000 LT Debt 475,000 Equity 1,082,000 Total L&E 1,860,000

Whats the firms gross profit margin?

a. 24.2%

b. 26.2

c. 28.2

d. 30.2

e. 32.2

f. None of above

Whats the firms net working capital?

a. 657,000

b. 707,000

c. 583,000

d. 456,780

e. 852,000

f. None of above