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Alik [6]
2 years ago
6

Consider the following: Lumber Revenues, $120,000; Hardware Revenues, $90,000; Cost of Sales, $130,000; All other costs and expe

nses, $35,000; Investment Income, $8,000; Income Tax Expense, $13,000; Net Income, $40,000. What is the net profit margin?
Business
1 answer:
ANEK [815]2 years ago
5 0

Answer:

19.05%

Explanation:

Data provided in the question:

Lumber Revenues = $120,000

Hardware Revenues = $90,000

Cost of Sales = $130,000

All other costs and expenses = $35,000

Investment Income = $8,000

Income Tax Expense = $13,000

Net Income = $40,000

Now,

The net profit margin = [( Net income) ÷ (Total revenue ) ] × 100%

or

The net profit margin = [ $40,000 ÷ ( $120,000 + $90,000 ) ] × 100%

or

The net profit margin = [ $40,000 ÷ $210,000 ] × 100%

or

The net profit margin = 0.1905 × 100%

or

The net profit margin = 19.05%

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$9.687

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Value of stock after year 5 will be given as:

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= \frac{1.3689*(1+0.07)}{0.16-0.07}

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Cv= Fd* Pv of discounting factor

Where Cv = current value of stock

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Pv = Present value of discounting factor

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The value of stock today =

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