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 using 20% of net sales. Given the increased incentive, they expect net sales to increase by 15%. As a result, they estimate that gross profit will increase by $44,524 and operating expenses by $74,112. Compute the expected new net income.

NET INCOME:

PROFIT MARGIN RATIO:

GROSS PROFIT RATE: