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A small company has $7,000,000 in (annual) revenue, spends 52% of its revenues on purchases, and has a net profit margin of 6.25%. They would like to increase their profits and they are looking at focusing in one of two directions. First, they think they can save 1.25% 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 1.25% savings to purchasing expenses?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M93115127

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