Evaluate the profit margin on sales

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Reference no: EM135445

The CEO of Smartphone Apps, LLC is preparing a loan application. Using the data below (only), prepare an Income Statement. Within this Income statement, add totals for Cost of Goods Sold, Sales General, Gross Margin, and Administrative, Earnings before Taxes and Interest, Pretax Income, and Net Income. Also evaluate the Profit Margin on Sales. Submit using a spreadsheet.

Net Revenue $1,458,000

Production Labor Costs $385,444

Material Costs $247,500

Marketing $127,000

Depreciation $58,122

Research and Development $98,000

Administrative $258,300

Interest Expense $21,608

Taxes 25% of pretax Income

Slot Precision Services, Inc. has five alternative broaching processes/ machines that are being studied. Only one will be selected and the data is shown below. Recommend the choice for management that uses the internal rate of return criterion. Compare this with the decision with that of a Present Worth criterion.

Alternatives Investment in year 0 Annual Cash Flow Salvage value in last year

1 $50,000 $18,000 $0

2 $250,000 $85,000 $75,000

3 $350,000 $105,000 $125,000

4 $600,000 $150,000 $400,000

5 $800,000 $165,000 $600,000

Reference no: EM135445

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