The vice president of marketing and the director of human resources have developed a proposal whereby the
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Question:
The vice president of marketing and the director of human resources have developed a proposal whereby the company would compensate the sales force on a strictly commission basis. Given the increased incentive, they expect net sales to increase by15%. As a result, they estimate that gross profit will increase by $48,532and expenses by $70,320. Compute the expected new net income. Then, compute the revised profit margin and gross profit rate. (Ignore income tax effects.)
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