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Part $1$

Local Co$.$ has sales of

$ $10\mathrm{.}0$$$10\mathrm{.}0$

million and cost of sales of

$ $6\mathrm{.}0$$$6\mathrm{.}0$

million. Its$$ selling, general and administrative expenses are$$

$ $500$ comma $000$$$500,000$

and its research and development is

$ $1\mathrm{.}0$$$1\mathrm{.}0$

million. It has annual depreciation charges of

$ $1\mathrm{.}0$$$1\mathrm{.}0$

million and a tax rate of

$35\%35\%.$

$$Local$\text{'}$s gross margin is

$40\mathrm{.}0040\mathrm{.}00\%,$

its operating margin is

$15\mathrm{.}0015\mathrm{.}00\%,$

and its net profit margin is

$9\mathrm{.}759\mathrm{.}75\%.$

If Local Co$.$ had interest expense of

$ $800$ comma $000$$$800,000,$

how would that affect each of its$$ margins?

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Part $1$

$$Local$\text{'}$s new gross margin is

enter your response here$\%,$

new operating margin is

enter your response here$\%,$

and new net profit margin is

enter your response here$\%.$