Refer to the income statement above. Luther's net profit margin for the year ending December 31, 2005 is closest to ________
Luther Corporation
Consolidated Income Statement
Year ended December 31 (in $millions)
2006 2005
Total sales 610.1 569.6
Cost of sales -500.2 -389.2
Gross profit 109.9 180.4
Selling, general, and
administrative expenses -40.5 -39.6
Research and development -24.6 -21.6
Depreciation and amortization -3.6 -3.3
Operating income 41.2 115.9
Other income -- --
Earnings before interest and taxes (EBIT) 41.2 115.9
Interest income (expense) -25.1 -14.2
Pretax income 16.1 101.7
Taxes -5.5 -35.595
Net income 10.6 66.105
Price per share $16 $15
Sharing outstanding (millions) 10.2 8.0
Stock options outstanding (millions) 0.3 0.2
Stockholders' Equity 126.6 63.6
Total Liabilities and Stockholders' Equity 533.1 386.7
A) 11.61%
B) 5.80%
C) 9.28%
D) 13.93%
Answer: A
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