The balance sheet and income statement shown below are for Byrd Inc, and the data are to be used for the following questions. Note that the firm has no amortization charges, it does not lease any assets, and none of its debt must be retired during the next 5 years (notes payable will be rolled over).

BALANCE SHEET

Cash $ 140.0 Accounts payable $ 800.0

Accts. receivable 880.0 Notes payable 600.0

Inventories 1,320.0 Accruals 400.0

Total current assets $2,340.0 Total current liabilities $1,800.0

Long-term bonds 1,000.0

Total debt $2,800.0

Common stock (50,000 shares) 200.0

Retained earnings 1,000.0

Net plant & equip. 1,660.0 Total common equity $1,200.0

Total assets $4,000.0 Total liabilities & equity $4,000.0

INCOME STATEMENT

Net sales $6,000.0

Operating costs 5,599.8

Depreciation 100.2

EBIT $ 300.0

Less: Interest 96.0

EBT $ 204.0

Less: Taxes 81.6

Net income $ 122.4

OTHER DATA

Shares outstanding (millions) 60.00

Common dividends $42.8

Interest rate on N/P and long-term bonds 6.0%

Federal plus state income tax rate 40%

Year-end stock price $30.60

What is the firm's profit margin?

a. 2.04%

b. 2.16%

c. 2.28%

d. 2.40 %

e. 2.52 %