Problema Solution
A stadium brings in $16.25 million per year. It pays football-related expenses of $13.5 million and stadium expenses of $2.7 million per year. What is the stadium's current profit margin?
Answer provided by our tutors
Profit margin is calculated by finding the net profit as a percentage of the revenue:
Profit margin = Net profit / Revenue
Net profit is Revenue minus Cost:
Revenue = $16.25 million
Cost = $13.5 million + $2.7 million
Net profit = 16.25 million - (13.5 million + 2.7 million)
Net profit = $0.05 million
Profit margin = 0.05 / 16.25
Profit margin = 0.003077 or 0.3077%