Question 14 Jason Corp. has a permanently impaired asset that must be written down from it
s carrying value of $5,000,000 to its present value of future cash flows of $3,500,000. The asset’s salvage value is $1,000,000. Before considering the asset write-down, Jason Corp.’s financial data are as follows (in $): Sales 27,000,000 Cost of Goods Sold (15,000,000) Gross Profit 12,000,000 Depreciation Expense (5,000,000) Other Expenses (1,000,000) Operating Income (EBIT) 6,000,000 Interest Expense (1,000,000) Income Taxes Expense (2,000,000) Net Income 3,000,000 When Jason Corp. takes the write-down, its operating profit margin will be closest to: U4 Q/ h; g4 D/ O
A.18.5%.
B.22.2%.
C.16.7%.
D.14.2%.