Question

A stadium brings in $16.25 million per year. it pays football-related expenses of $13.5 million and stadium expenses of $2.7 million per year. whatis the stadium's current profit margin

Answer 1

We have that

Profit margin is calculated by finding the net profit as a percentage of the revenue

Profit margin = [Net profit / Revenue]

Net profit= [Revenue-Cost]

we know that

Revenue = $16.25 million

Cost = $13.5 million + $2.7 million

Net profit = [16.25 million - (13.5 million + 2.7 million)]

Net profit = $0.05 million

Profit margin = 0.05 / 16.25

Profit margin = 0.003077 or 0.3077%