The following information pertains to Rural Company. Assume that all balances sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets

Cash and short-term investments $ 40,000

Accounts receivable (net) 30,000

Inventory 25,000

Property, plant and equipment 215,000

Total assets $310,000

Liabilities and Stockholders' Equity

Current liabilities 60,000

Long-term liabilities 75,000

Stockholders' equity-common 175,000

Total Liabilities and Stockholders' Equity $310,000

Income Statement

Sales 130,000

Cost of goods sold 45,000

Gross profit 85,000

Operating expenses 25,000

Net income 60,000

Number of shares of common stock 5,000

Market price of common stock $22

Dividends per share 1.00

What is the profit margin for Rural?

A) 27.8

B) 70.6%

C) 65.4%

D) 46.2%