Local Co. has sales of $10 million and cost of sales 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 $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?
Local Co. has sales of $10 million and cost of sales 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 $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?
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Local Co. has sales of $10 million and cost of sales 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 $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?
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