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Sales Cost of goods sold Selling, general, and administrative expense Depreciation Research and development Total costs and expenses Operating Income Base Case $2,110 $ 1,477 295 160 51 2% Increase in Gross Margin $1,983 $ 127 $ $ 2% Decrease in Tax Rate $ $ 5% Decrease in Sales 10000

Sales Cost of goods sold Selling, general, and administrative expense Depreciation Research and development Total costs and expenses Operating Income Base Case $2,110 $ 1,477 295 160 51 2% Increase in Gross Margin $1,983 $ 127 $ $ 2% Decrease in Tax Rate $ $ 5% Decrease in Sales 10000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please show me the work (formulas in excel)

For the base case in this section, as a percentage of sales, COGS = 70 percent, SGA = 14 percent, R&D = 2.4 percent. Depreciation, Interest expense are fixed as stated. Tax Rate is 20 percent.
Transcribed Image Text:For the base case in this section, as a percentage of sales, COGS = 70 percent, SGA = 14 percent, R&D = 2.4 percent. Depreciation, Interest expense are fixed as stated. Tax Rate is 20 percent.
Sales Cost of goods sold Selling, general, and administrative expense Depreciation Research and development Total costs and expenses Operating Income Interest expense Earnings before Income Taxes Provision for Income Taxes Net Income Base Case $2,110 $ 1,477 295 160 51 $1,983 $ 127 2% Increase in Gross Margin 39 $88 $ 18 $70 $ $ $ $ $ 2% Decrease in Tax Rate $ $ $ $ 5% Decrease in Sales
Transcribed Image Text:Sales Cost of goods sold Selling, general, and administrative expense Depreciation Research and development Total costs and expenses Operating Income Interest expense Earnings before Income Taxes Provision for Income Taxes Net Income Base Case $2,110 $ 1,477 295 160 51 $1,983 $ 127 2% Increase in Gross Margin 39 $88 $ 18 $70 $ $ $ $ $ 2% Decrease in Tax Rate $ $ $ $ 5% Decrease in Sales
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