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BCG Potential Test

Hello,

Does anyone please know how to tackle the attached math word problem?

BCG Potential Test Math Problem

Hello,

Does anyone please know how to tackle the attached math word problem?

BCG Potential Test Math Problem

(edited)

3 answers

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Best Answer

To calculate gross margin subtract Cost from total revenue and divide that number by total revenue.

In other words, divide the profit by the total revenue. So in the case of the NBA it would be 5/65, and for EBL 4/42 and so on.

So just add up all the profits (5+4+12+2=23) and all the revenues (65+42+67+31=205) and this would be 23/205, or approx 9%. None of the above.

To calculate gross margin subtract Cost from total revenue and divide that number by total revenue.

In other words, divide the profit by the total revenue. So in the case of the NBA it would be 5/65, and for EBL 4/42 and so on.

So just add up all the profits (5+4+12+2=23) and all the revenues (65+42+67+31=205) and this would be 23/205, or approx 9%. None of the above.

PS I believe that this formula is preferable to the other because it makes few sense to sum single margin percentages and divide the total by four, because I wouldn't weigh the margins by the revenue and this wouldn't provide me with a useful business information. — Anonymous on Oct 16, 2020

Thank you Stefano — Aisha on Oct 22, 2020

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For formulas, google is your friend!

Get the gross margin formula and calculate it for each individual player. Then, average it out (i.e. add them and divide by 4)

NBA: 5/65 = 7.7%

EBL: 4/42 = 9.5%

CSL: 12/67 = 17.9%

Client: 2/31 = 6.5%

(8.3+10.53+21.82+6.89)/4 = 10.4%

Gross Margin Formula

For formulas, google is your friend!

Get the gross margin formula and calculate it for each individual player. Then, average it out (i.e. add them and divide by 4)

NBA: 5/65 = 7.7%

EBL: 4/42 = 9.5%

CSL: 12/67 = 17.9%

Client: 2/31 = 6.5%

(8.3+10.53+21.82+6.89)/4 = 10.4%

Gross Margin Formula

(edited)

Thanks Ian — Aisha on Oct 22, 2020

Hi there,

The gross margin is equivalent to (profit)/(revenue) and in this situation it's (profit)/(profit+costs).

This way you can calculate the exact result and choose the adequate answer.

I hope this helps!

Mehdi

Hi there,

The gross margin is equivalent to (profit)/(revenue) and in this situation it's (profit)/(profit+costs).

This way you can calculate the exact result and choose the adequate answer.

I hope this helps!

Mehdi

Thanks Mehdi — Aisha on Oct 22, 2020

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