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A small company has $3,000,000 in (annual) revenue, spends 48% of its revenues on purchases, and has a net profit margin of 7.75%. They would like to increase their profits and they are looking at focusing in one of two directions. First, they think they can save 1.50% on their purchase expenses. Or second, they can focus on increasing sales.

By what percentage would they have to increase sales in order to equal a 1.50% savings to purchasing expenses? (Write your answer as a percentage.

Operation Management, Management Studies

  • Category:- Operation Management
  • Reference No.:- M92461329

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