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Local Co. has sales of $10.6 million and cost of sales of $5.7 million. Its selling, general and administrative expenses are $520,000 and its research and development is $1.1 million. It has annual depreciation charges of $1.1 million and a tax rate of 35%.

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 $320,000, how would that affect each of its margins?

e. If Local Co.had interest expense of $750,000, how would that affect each of its? margins?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M93059533

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