Question

A stadium has two sponsorship deals. Deal A has revenue of $100,000 and expenses of $10,000. Deal B has revenue of $50,000 and expenses of $20,000. What is the stadium's average profit as a percentage of revenue on these two deals?

Answer 1

Profit can be found by subtracting revenue from expenses.

The profit for Deal A is $100,000 - $10,000 = $90,000

The average profit as a percentage of revenue for the stadium for Deal A is Average profit divided by revenue multiplied by 100. That is 90,000/100,000 x 100 is 90%

The profit for Deal B is $50,000 - $20,000 = $30,000

The average profit as a percentage of revenue for the stadium for Deal B is Average profit divided by revenue multiplied by 100. That is 30,000/50,000 x 100 is 60%

Answer 2

((100,000 + 50,000) – (10,000 + 20,000)) / (100,000 + 50,000) =  80%