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MKT 100 Study Guide - Cash Register


Department
Marketing
Course Code
MKT 100
Professor
Paul Finlayson

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Worksheet: Metric 2 Percentage Change
1)Eds is a small deli, which has had great success in its second year of
operation. Revenues in Year 2 are $570,000, compared with $380,000 in Year
1. What is Eds year-over-year sales growth rate?
Answer:
Year-over-Year Sales Growth = (Year 2 Year 1) / Year 1 * 100%
= ($570,000 - $380,000) / $380,000 * 100%
= 50%
2)A pair of jeans that normally sells for $75 is marked down 30% and then
reduced at the cash register another 10%? Is this a total reduction of 40%? If
not, what is the percent reduction?
Answer:
Let Price 1 be the initial price of $75, let Price 2 be the price after the 30%
mark down, and Price 3 be the price after additional 10% reduction at the
cash register.
Initial Reduction = -30% = (Price 2 Price 1) / Price 1
-0.3 = (Price 2 - $75) / $75
-0.3 * $75 = Price 2 - $75
Price 2 = -0.3 * $75 + $75
= $52.50
Second Reduction = -10% = (Price 3 Price 2) / Price 2
-0.1 = (Price 3 - $52.50) / $52.50
-0.1 * $52.50 = Price 3 - $52.50
Price 3 = -0.1 * $52.50 + $52.50
= $47.25
Total Percent Reduction = (Price 3 Price 1) / Price 1 * 100%
= ($47.25 - $75) / $75 * 100%
= 37%
3)A small retain chain posts impressive percentage growth figures, moving
from $58 million to $107 million in sales from one year to the next. Despite
this dynamic growth, however, analysts cast doubt on the firms business
model, warning that its existing stores growth measure suggests that its
concept is failing. Based on the chart below, and assuming that stores were
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