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17 April, 22:19

Crosswhite Corporation's sales last year were $1,270,000, its gross margin was $400.000, its net operating income was $53,769, and its net income was $26,500. The company's net profit margin percentage is closest to: Mutiple Choice : a. 042% b. 032% c. 2.1% d. 31.5%

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  1. 18 April, 00:49
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    option (c) 2.1%

    Explanation:

    Data provided in the question:

    Crosswhite Corporation's sales last year = $1,270,000

    Gross margin = $400.000

    Net operating income = $53,769

    Net income = $26,500

    Now,

    Net profit margin = [ Net income : Sales ] * 100%

    therefore,

    Net profit margin = [ $26,500 : $1,270,000 ] * 100%

    or

    Net profit margin = [ $26,500 : $1,270,000 ] * 100%

    or

    Net profit margin = 0.02086 * 100%

    or

    Net profit margin = 2.086% ≈ 2.1%

    Hence,

    the answer is option (c) 2.1%
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