Base price: $15,555
Options: 425
Destination charges: $250
Sticker price: $16,230
Profit margin: __________
Dealer profit: $1,275
Answers:
0.079% 12.7%
7.86%
Working on business math. Please tell me how you got your answer.
Options: 425
Destination charges: $250
Sticker price: $16,230
Profit margin: __________
Dealer profit: $1,275
Answers:
0.079% 12.7%
7.86%
Working on business math. Please tell me how you got your answer.
-
As a percentage of the sticker price, the dealer profit would be worked out by ($1,275 / $16,230)*100 = 7.85582% (or 7.86% to 2 decimal places)
Assuming however that your confusion and the multiple choices are your own workings out rather than specified options, I would point out the following:
Dealer Profit is $1,275 of this *Sticker Price* (No dealer adds his/her profit margin on top of the advertised price after all). Therefore, to work out the profit margin, you first need to work out the actual cost of the car:
Sticker Price - Dealer Profit = Cost of Car
$16,230 - $1,275 = $14,995
The Profit Margin would therefore be ($1,275 / $14,995)*100 = 8.50283% (or 8.50% to 2 decimal places).
Assuming however that your confusion and the multiple choices are your own workings out rather than specified options, I would point out the following:
Dealer Profit is $1,275 of this *Sticker Price* (No dealer adds his/her profit margin on top of the advertised price after all). Therefore, to work out the profit margin, you first need to work out the actual cost of the car:
Sticker Price - Dealer Profit = Cost of Car
$16,230 - $1,275 = $14,995
The Profit Margin would therefore be ($1,275 / $14,995)*100 = 8.50283% (or 8.50% to 2 decimal places).