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what is the answer to this problem? b-1. Assume the firm...

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Accounting

what is the answer to this problem? image
b-1. Assume the firm hires Ms. Carr, an efficiency expert, as a consultant She suggests that by increasing selling and administrative expenses to 14 percent of sales, sales can be increased to $1,050,900. The extra sales effort will also reduce cost of goods sold to 74 percent of sales, (There will be a larger markup in prices as a result of more aggressive selling) Depreciation expense will remain at $11,000. However, more automobiles will have to be carried in inventory to satisfy customers and interest expense will go up to $15,800. The firm's tax rate will remain at 30 percent. Compute revised earnings after taxes based on Ms. Care's suggestions for Lemon Auto Wholesalers (Round taxes and earnings after taxes to 1 decimal place.) Answer is complete but not entirely correct. Lemon Auto Wholesalers Income Statement Sales $ 1,050.900 Cost of goods sold 777686 Gross profit 273.234 Selling and administrative pense 147.126 Depreciation experne 51.000 Operating profit $ 115.000 Interest expense 15,800 Earnings before taken Os 90 308 Taxes 195220 OOOOOOO Search lije %2 3 $ 4 % 5 6 & 7 8 9 E RT Y U O PC D F G H J K L L

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