What does multiplying the profit percentage by 100 yield?

Study for the Electronic Graduate Management Admission Test. Prepare with comprehensive quizzes and explanations, each question includes detailed insights and tips. Get exam-ready!

Multiplying the profit percentage by 100 yields the profit expressed as a percentage. Profit percentage is typically expressed as a fraction of the cost price and is calculated by taking the profit earned, dividing it by the cost price, and then multiplying by 100 to express it in percentage terms.

For instance, if a profit percentage is 25%, it represents that for every 100 units of currency spent on cost price, 25 units are earned as profit. Thus, this operation reaffirms that the value obtained is indeed a percentage figure, highlighting the relationship between profit and cost price in terms of percentage.

The other options relate to different concepts: one refers to the absolute profit amount which is calculated differently, while another suggests a focus on returns on investment, which involves different calculations and metrics that account for initial investments and returns rather than just profit percentages. The mention of changes in cost price over time is also unrelated to the direct interpretation of profit percentage.

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