Question

A small company has $8,250,000 in (annual) revenue, spends 49% of its revenues on purchases, and has a net profit margin of 8. 5%. They would like to increase their profits and they are looking at focusing in one of two directions. First, they think they can save 2. 05% on their purchase expenses. Or second, they can focus on increasing sales. By how many dollars would they have to increase sales in order to equal a 2. 05% savings to purchasing expenses? (Display your answer as a whole number. )

Answer 1

as far as I can read that, well, the company has a revenue income of 8250000 and their expenditure on purchases is 49% of that amount, how much is that?

`\begin{array}c \cline{1-1} \textit{a\% of b}\\ \cline{1-1} \\ \left( \cfrac{a}{100} \right)\cdot b \\\\ \cline{1-1} \end{array}~\hspace{5em}\stackrel{\textit{49\% of 8250000}}{\left( \cfrac{49}{100} \right)8250000}\implies 4042500`

so on saving 2.05% of purchasing expenses or namely 2.05% of 4042500

`\begin{array}c \cline{1-1} \textit{a\% of b}\\ \cline{1-1} \\ \left( \cfrac{a}{100} \right)\cdot b \\\\ \cline{1-1} \end{array}~\hspace{5em}\stackrel{\textit{2.05\% of 4042500}}{\left( \cfrac{2.05}{100} \right)4042500}\implies 82871.25`

so sales must be increased by that much in order to match the 2.05% of 4042500.