Fundamentals of Corporate Finance (3rd Edition) (Pearson Series in Finance)
Fundamentals of Corporate Finance (3rd Edition) (Pearson Series in Finance)
3rd Edition
ISBN: 9780133507676
Author: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Publisher: PEARSON
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Chapter 2, Problem 23P

Local co. has sales of $10 million and cost of $6 million. Its selling, general, and administrative expenses are $500,000 and its research and development is $1 million. It has annual depreciation charges of $l million and a tax rate of 35%.

  1. What is Local's gross margin?
  2. What is Local's operating margin?
  3. What is Local's net profit margin?

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What is locals net profit margin?
Local Co. has sales of $10.3 million and cost of sales of $6.1 million. Its selling, general and administrative expenses are $460000 and its research and development is $1.1 million. It has annual depreciation charges of $1.1 million and a tax rate of 25% . a. What is Local's gross margin? b. What is Local's operating margin? c. What is Local's net profit margin? d. If Local Co. had an increase in selling expenses of $270000, how would that affect each of its margins?
Local Co. has sales of $10.9 million and cost of sales of $5.9 million. Its selling, general and administrative expenses are  $500,000 and its research and development is $1.4 million. It has annual depreciation charges of $1.4 million and a tax rate of 25%. a. What is Local's gross margin? b. What is Local's operating margin? c. What is Local's net profit margin? a. What is Local's gross margin? Local's gross margin is _____%.

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Fundamentals of Corporate Finance (3rd Edition) (Pearson Series in Finance)

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