Question: XYZ Software Solutions develops software applications. Financial figures for 2023 are provided below: Ledgers (in $ millions) Amount Software Development Costs 8.5 Subscription Revenue 25.0

XYZ Software Solutions develops software applications. Financial figures for 2023 are provided below:

Ledgers (in $ millions)

Amount

Software Development Costs

8.5

Subscription Revenue

25.0

Marketing Expenses

3.0

General Administrative Expenses

1.5

Requirements:

  • Prepare XYZ Software Solutions' income statement for the year ended December 31, 2023.
  • Calculate the Gross Profit Margin and Operating Expenses.
  • Determine the Net Income before taxes.
  • Evaluate the impact of a 12% increase in subscription revenue on profitability.
  • Recommend strategies to reduce software development costs by 15%.

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