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Suppose that in 2019, Global launches an aggressive marketing campaign that boosts sales by 20%. However, their operating margin falls from 5.57% to 4.7%. Suppose

Suppose that in 2019, Global launches an aggressive marketing campaign that boosts sales by 20%. However, their operating margin falls from 5.57% to 4.7%. Suppose that they have no otherincome, interest expenses areunchanged, and taxes are the same percentage of pretax income as in 2018.

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GLOBAL CONGLOMERATE CORPORATION Income Statement Year Ended December 31 (in $ millions) 2018 2017 Total sales 186.70 176.10 Cost of sales (153.40) (147.30) Gross Prot 33.30 28.80 Selling, general, and administrative expenses (13.50) (13.00) Research and development (8.20) (7.60) Depreciation and amortization (1.20) (1.10) Operating Income 10.40 7.10 Other income Earnings before interest and taxes (EBIT) 10.40 7.10 Interest income (expense) (7.70) (4.60) Pretax income 2.70 2.50 Taxes (0.70) (0.60) Net Income 2.00 1.90 Earnings per share: $0.556 $0.528 Diluted earnings per share: $0.526 $0.500

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