For an organization with annual sales of $500 million, purchases of $300 million and profit of $50 million, a 10 percen...

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For an organization with annual sales of $500 million, purchases of $300 million and profit of $50 million, a 10 percent redu

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Answer 1

Answer #1

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Option E: 75% (Sales Increase of 75% would be required to achieve the same percentage increase in profit).

Sales =$500

Purchase =$300

Profit =$50

Profit %= 50/500=10%

Reduce in purchase in % =10%

So reduce in purchase =10%*300=$30

So increase in sales for keeping same profit % = reduce in purchase/Profit %=30/10%=$300

Sales increase in %=increase in sales for keeping same profit %/ Sales =300/500=75%

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Answer 2

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