Question: question 12 see the explanation below to work the problem...
See the explanation below to work the problem.
XYZ Company, a 'for-profit' business, had revenues of $12 million in 2016. Expenses other than
depreciation totaled 75 percent of revenues. XYZ Company, must pay taxes at a rate of 40 percent of
pretax (operating) income. All revenues were collected in cash during the year, and all expenses other
than depreciation were paid in cash.
Depreciation originally was $1.5 million; however, a change in the depreciation schedule (still within
GAAP) has now made the depreciation expense DOUBLE.
Based on this change in depreciation expense, what would XYZ's profit margin be?