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A Grocery dealer cheats to the extent of 10% while buying as well as selling by using false weight. What is his increase in the profit percentage?
The increase in profit percentage due to cheating would be 21%.
Let’s assume the dealer buys and sells goods at a cost price and a selling price per unit. If the dealer cheats to the extent of 10% in both buying and selling, it means:
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- When buying, he actually pays for only 90% of the actual weight.
- When selling, he actually sells only 90% of the actual weight.
Let’s illustrate this with an example:
Suppose he buys 100 kg of goods at $1 per kg, so he pays $100.
With his cheating, he actually gets 90 kg for the price of 100 kg, so his effective cost for 90 kg is still $100.
Now, let’s say he sells these 90 kg at $1.10 per kg, so his total selling price would be $99 (90 kg * $1.10).
His profit would then be $99 – $100 = -$1.
However, this simple calculation might not show the full picture because it does not take into account the overall effect on the profit percentage. Let’s analyze it further.
Original cost price (CP) = Selling price (SP) = $100.
With the cheating, he buys 90 kg for $100 and sells only 90 kg.
Profit with cheating = SP – CP = $99 – $100 = -$1.
Now, to find the increase in profit percentage:
Original profit percentage = (Profit / CP) * 100 New profit percentage = (New Profit / New CP) * 100
New CP = CP – (10% of CP) = 0.9 * CP New SP = SP + (10% of SP) = 1.1 * SP
New Profit = New SP – New CP = (1.1 * SP) – (0.9 * CP)
Increase in profit percentage = (New Profit / CP) * 100 – Original profit percentage
Let’s calculate it:
Original profit percentage = (-$1 / $100) * 100 = -1%
New CP = 0.9 * $100 = $90 New SP = 1.1 * $100 = $110 New Profit = ($110 – $90) = $20
Increase in profit percentage = ($20 / $100) * 100 – (-1%) = 20% + 1% = 21%
So, the increase in profit percentage due to cheating would be 21%.
Profit, Loss & Discount
Profit, loss, and discount are important concepts in business and finance. Here’s a brief explanation of each:
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Profit: Profit is the financial gain made in a transaction or business operation after deducting all costs and expenses. It’s calculated by subtracting the total cost or investment from the total revenue generated. Mathematically, Profit = Revenue – Cost.
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Loss: Loss occurs when the total expenses or costs of a transaction or business operation exceed the total revenue generated. In other words, it’s the negative financial outcome of a transaction. Mathematically, Loss = Cost – Revenue.
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Discount: A discount is a reduction in the price of a product or service. It’s often offered by sellers to attract customers or increase sales volume. Discounts can be expressed as a percentage of the original price (e.g., 10% discount) or as a fixed amount (e.g., $50 discount). The discounted price is calculated by subtracting the discount from the original price.
In business, understanding these concepts is crucial for making informed decisions, analyzing financial performance, and setting pricing strategies. For example, a business owner may analyze their profit margins to determine the profitability of different products or services. They may also offer discounts strategically to increase sales during slow periods or clear out excess inventory. Similarly, being aware of potential losses can help businesses identify areas for improvement and implement cost-saving measures.
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