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Question: Business and finance math problem?

(Posted by: chriss832002 on 2007-12-05 12:50:51)

The revenue for a sandwich shop is directly proprtional to its advertising budget. When the owner spent $2, 000 a month on advertising the revenue was $120, 000. If the revenue is now 180, 000 how much is the owner spending on advertising?

Posted by: tscgmc on 2007-12-05, 12:55:05

Ratio of .016666666 The answer is $3000 in advertising

Posted by: Kathryn on 2007-12-05, 12:57:11

2,000/ 120,000 = .01666667 (or 1 2/ 3%) 1 2/ 3% * 180,000 = 3,000 With revenue of $180,000, the shop would be spending $3,000 on advertising.

Posted by: hoopstar231 on 2007-12-05, 13:00:42

$120,000 in revenue divided by an ad budget of $2,000 gives you a figure of 60. For every $1 spent on advertising, $60 are returned in revenue. Therefore if $180,000 is seen in revenue, then divide it by 60 to get $3,000 in ad budget. The ratio of 0.01666stated above is close, but will put your final answer off by a few cents.

Posted by: jevana on 2007-12-05, 13:02:01

The percentage of the advertising to the revenue is 1.67%, ie 2000/ 120000x100%= 1.67% Then multiply 1.67% by 180,000 and you get $3,000.