You want to start your own retail furniture store, and you have already gathered a great deal of information on location, layout, form of ownership, business failure rates, etc. In applying for a loan, you notice that a projected income statement is required. Your problem is to complete this projected "P&L," given a desired income of $23,000 and the following published statistics. Cost of Goods Sold 60.3 percent of net sales Operating Expenses 36.4 percent of net sales Gross Profit Margin 39.7 percent of net sales

1) If a market survey indicates that your firm's sales would be $620,000, what net profit would you expect to earn?

2) How much should your firms sales be if you would like to achieve the desired income above?