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1 year ago

Mega corp.has $10,000 in net income and $40,000 in sales. What is mega corp.’s profit margin?

Business

1 answer:

lakkis [162]1 year ago

6 0

Profit margin is 25%

Given net income is $10,000 and sales is $40,000.

Cost = Sales - net income

=$40,000-$10,000

=$30,000

Profit margin to be computed.

Profit margin measures how much the money a firm or the business activity produces by dividing income by the revenues. Profit margin, given as a percentage, is basically the number of cents earned for every dollar of the sales.

Profit margin is computed with the formula given below:

Profit margin= Revenue-Cost / Revenue

= $40,000- $30,0000/ $40,000

= 0.25

=25%

Therefore, the correct option of the profit margin is c. 25%.

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