The profit margin on a sofa set is 100%. If the cost price of the sofa set falls by 20% then what will be the new profit margin (in %)?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 150
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Understanding |
Application |
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Profit margin = 100% |
Suppose CP = X So, SP = 2X |
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Cost price of the sofa set falls by 20% |
So, New CP = 0.8X Hence, Profit margin = [(2X – 0.8X)/0.8X] × 100 = 150% |