Answer:
The answer is option (d)
Estimated profit margin for the upcoming year=$1,218,000
Explanation:
Profit margin can be expressed as the ration of total net income to the net sales.
From the given information;
Last years profit margin carried forward to this year=$50,000
Sponsorship this year=$1,168,000 without any additional expenses,meaning the profit margin=$1,168,000
The sponsorship=profit margin since the whole proportion of the sponsorship income is the profit
Estimated profit margin for the upcoming year=Last years profit margin+profit margin due to sponsorship
where;
Last years profit margin=$50,000
Profit margin due to sponsorship=$1,168,000
replacing;
Estimated profit margin for the upcoming year=($1,168,000+$50,000)
Estimated profit margin for the upcoming year=$1,218,000
