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      Question

      If a business pricing model relies on a 25% markup on

      the Cost of Goods Sold (COGS), what will be its Gross Profit Ratio on Sales?
      A 33.33% Correct Answer Incorrect Answer
      B 25.00% Correct Answer Incorrect Answer
      C 20.00% Correct Answer Incorrect Answer
      D 15.00% Correct Answer Incorrect Answer
      E 75.00% Correct Answer Incorrect Answer

      Solution

      Markup is profit based on cost, while Gross Profit Ratio (Margin) is profit based on sales. If COGS is $100, a 25% markup means the profit is $25. Therefore, the Sales price is:

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