Suppose a company has $19,000,000 in (annual) revenue and spends 55% of its revenues on purchases. By how much can this company increase its bottom line (profits) if it can decrease purchasing costs by 1.25%? (Display your answer as a whole number.)
Question
Suppose a company has $19,000,000 in (annual) revenue and spends 55% of its revenues on purchases. By how much can this company increase its bottom line (profits) if it can decrease purchasing costs by 1.25%? (Display your answer as a whole number.)
Solution
Sure, let's break it down step by step:
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Calculate the total amount spent on purchases: The company spends 55% of its $19,000,000 revenue on purchases.
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Determine the reduction in purchasing costs: The company can decrease purchasing costs by 1.25%.
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Calculate the increase in the bottom line (profits): The reduction in purchasing costs directly increases the bottom line.
So, the company can increase its bottom line by $130,625.
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