Question: Pretax earnings increase by $ _ _ _ _ _ , sales would have to increase by $ _ _ _ _ _ _ to
Pretax earnings increase by $ sales would have to increase by $
to have the same effect under the old pretax profit margin.
Every dollar saved in purchasing lowers the cost of goods sold by
one dollar and increases pretax profit by one dollar
Every dollar saved in purchasing also lowers inventory and, as a
result, total assets
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