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SM.66 A small regional retailer is looking for ways to increase profits. Given its impressive record of growth, the sales and marketing vice president wants
SM.66 A small regional retailer is looking for ways to increase profits. Given its impressive record of growth, the sales and marketing vice president wants to target a 4% increase in sales to meet the profitability goals. The company currently has revenues of $29,000,000 (annually), spends 70% of its revenues on purchases, and has a net profit margin of 5%. You are a buyer working for this company and you want to show the vice president that it may be easier to reach the profitability goals by lowering purchasing expenses. If the company achieves its revenue growth target of 4%, by how many dollars would revenue increase? (Display your answer as a whole number.) 5800 Assuming that revenues stayed flat (meaning the company did not try to increase sales by the 4 percent target), by what percentage would they have to decrease purchasing expenses to equal the increased profit that would have come from a 4 percent increase to revenues? (Write your answer as a percentage, and display your answer to two decimal places.) Note: This question is to stretch your mind a bit and to show how much more, on a percentage basis, sales must increase in order to equal the bottom-line benefits of a modest decrease in purchasing expenses. There will not be a question like this on any assessment. The sales increase targeted percentage is (how many) times bigger than the required percentage decrease in purchasing expenses. (Display your answer as a whole number.) SM.61 Asmall but growing online retailer, Nile Corporation, has shown impressive growth in sales over the past several years, with sales this past year at $1 ,173,000. lithe company has a net profit margin of 4.25 percent, what would its net profit be (in dollars)? (Display your answer as a whole number.) 49,853 0 If in the next year the company achieves its revenue growth target of 12 percent, what would its total revenue be? (Display your answer as a whole number.) 1270750 0 If in the next year the company achieves its revenue growth target of 12 percent, and assuming its profit margin remained unchanged at 4.25 percent, what would its total profit be for next year? (Display your answer as a whole number.) 299,000 0 lithe company achieves its revenue growth target of 12 percent, by how many dollars will revenue increase? (Display your answer as a whole number.) 97750 0 If the company achieves its revenue growth target of 12 percent, by how many dollars will net profit increase? (Display your answer as a whole number.) 249150 0 Using the original revenue number of $1,173,000, if the company spends 71 percent of its revenue on purchases, what would be its purchasing expense? (Display your answer as a whole number.) 832,830 0 Assuming that revenues stayed flat (meaning the company did not try to increase sales by the 12 percent target), by what percentage would they have to decrease purchasing expenses to equal the increased profit that would have come from a 12 percent increase to revenues? (Write your answer as a percentage, and display your answer to two decimal places.) 29.91 0 %
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