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Difficulty: MediumProfit and Loss

An entrepreneur purchases 55 used electric scooters for $120\$120 each. She pays an additional flat fee of $150\$150 to replace the batteries for the entire batch. If she sells all 55 scooters for $210\$210 each, what is her overall profit percentage on this investment?

Answer: 40 %

Answer

40
The correct answer is found by first calculating the total investment, which includes both the purchase price of the scooters (600)andthebatteryreplacementcosts(600) and the battery replacement costs ( 150), yielding a total cost basis of 750.Thetotalrevenuefromsalesis750. The total revenue from sales is 1,050. Subtracting the total cost from the revenue gives a net profit of 300.Finally,dividingthe300. Finally, dividing the 300 profit by the $750 total investment yields a profit percentage of 40%.

Step-by-Step Solution

1
Calculate the total cost of purchasing the used scooters.
5×$120=$6005 \times \$120 = \$600
This establishes the initial base cost before overhead.
2
Calculate the total investment by adding the battery replacement cost.
$600+$150=$750\$600 + \$150 = \$750
Profit must be calculated using the total cost basis, including all overhead expenses.
3
Calculate the total revenue from selling the scooters.
5×$210=$1,0505 \times \$210 = \$1,050
Total revenue is needed to find the net profit.
4
Determine the net profit.
$1,050−$750=$300\$1,050 - \$750 = \$300
Net profit is total revenue minus total investment.
5
Calculate the profit percentage.
300750×100=40%\frac{300}{750} \times 100 = 40\%
Profit percentage is the net profit divided by the total investment (cost basis), expressed as a percentage.

Key Concept

Calculating profit percentage by factoring in both unit costs and multi-step overhead expenses.
Estimated Time:1m 0s
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Topics

Profit and Loss

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