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In an effort to increase sales, Marvin's Market has decided to increase it 2018 advertising expenses...

Question:

In an effort to increase sales, Marvins Market has decided to increase it 2018 advertising expenses by 20%. According to Mar

In an effort to increase sales, Marvin's Market has decided to increase it 2018 advertising expenses by 20%. According to Marvin's projections, this will lead to a 12% increase in gross revenue, a 10% increase in returns, an 8% increase in cost of goods sold, and 10% increases in overhead expenses and inventory losses. Given these assumptions and Marvin's 2017 profit and loss statement: Marvin's Market Profit and Loss Statement 2017 $550,987 $45,098 $505,889 $307,888 $198,001 Sale Activities Gross Revenue Less returns Net Revenue Cost of Goods Sold Gross Profit Operating Expenses Advertising expenses Overhead expenses Depreciation Total Operating Expenses Operating Profit Interest Inventory losses Profit Before Taxes Income Taxes Net Profit $45,000 $102,400 $16,500 $163,900 $34,101 $1,500 $16,000 $32,601 $6,846 $25,755 a. Prepare a projected 2018 profit and loss statement. b. Calculate gross margin, operating margin, and net margin for 2017 and 2018. c. Should Marvin increase his advertising budget? +

Answers

Calculation of tax rate for 20174 2018 $6846x100 - 20% $32601 marvins market Profit and loss Statement 2018_652 617105.44 4Date (6) Calculation of and Net margin gross margin, operating margin, for year 2017, 2018 Gross Profits/Margin operating pro

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