XYZ Software Solutions develops software applications for global markets. Financial figures for 2023 are as follows:

Ledgers:

• Software Development Costs: $6,000,000
• Subscription Revenue: $18,000,000
• Marketing Expenses: $2,500,000
• General Administrative Expenses: $1,000,000

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 10% increase in subscription revenue on profitability.
• Recommend strategies to reduce software development costs by 20% without compromising product quality.