Bell Brothers has $3,000,000 in sales. Its fixed costs are estimated to be $100,000, and its variable costs are equal to fifty cents for every dollar of sales. The company has $1,000,000 in debt outstanding at a before-tax cost of 10 percent. If Bell Brothers' sales were to increase by 20 percent, how much of a percentage increase can one expect in the company's net income??
A. ?15.66%
B. ?18.33%
C. ?19.24%
D. ?21.50%
E. ?23.08%
Answer: E
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