For an organization with revenue of $100 million,purchases of $60 million,and profit of $8 million before tax,a 10 percent reduction in purchase spend would result in an increase in profit of:
A)10 percent.
B)36 percent.
C)57 percent.
D)60 percent.
E)75 percent.

Question

Quizplus · Accepted Answer

A 10% reduction in purchase spend of $60 million is $6 million. Adding this to the original profit of $8 million results in a new profit of $14 million. The increase in profit is $6 million, which is 75% of the original $8 million profit.

For an Organization with Revenue of $100 Million,purchases of $60