Mr. Busi Ness buys and sells used cars. At one time he buys a car for Php120, 000 and sells it for a 25% profit. How much profit does he make on the transaction? What is the selling price of the car?
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Answer:
It goes without saying that car dealerships can't exist unless they are profitable. That's true for every business, from a neighborhood dry cleaner to a mega-retailer like Walmart. At auto dealerships, the rows of shiny new cars might prompt shoppers to believe that they're where the business makes most of its money.
But that's not the case. According to the most recent data from the National Automobile Dealers Association (NADA), the new-vehicle department of a car dealership accounts for about 58% of a dealership's total sales but less than 26% of a dealership's total gross profit. In addition to car sales, that figure also reflects profits from finance and insurance (F&I) products sold on new cars. That means such things as gap insurance, alarm systems and extended warranties.
Answer:
Profit: 30,000
Selling Price: 150,000
Step-by-step explanation:
SP = Selling Price
P = Profit
SP =
=
= 150,000
P = SP - IP (initial price)
= 150,000 - 120,000
= 30,000