2. Finance
3. question 12 see the explanation below to work the problem...

# Question: question 12 see the explanation below to work the problem...

###### Question details

Question #12

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?