Keywords: Selling price, loss percentage, profit percentage, cost price.
Required Approach: Factual and analytical. This question requires a step-by-step calculation to determine the selling price needed to achieve a 5% profit.
Points to Remember:
- Understanding the relationship between cost price, selling price, profit, and loss.
- Applying the formula for profit and loss percentage calculations.
Introduction:
Profit and loss are fundamental concepts in business and finance. Profit is the gain made on a transaction, while loss is the amount by which the selling price falls short of the cost price. Profit and loss percentages are calculated relative to the cost price. This question involves calculating the cost price of a bicycle given a loss percentage and then determining the selling price needed to achieve a 5% profit.
Body:
1. Calculating the Cost Price:
A 5% loss on the selling price of â¹1140 means that the selling price represents 95% of the cost price (100% – 5% = 95%). We can set up a proportion to find the cost price (CP):
95% of CP = â¹1140
0.95 * CP = 1140
CP = 1140 / 0.95 = â¹1200
Therefore, the cost price of the bicycle is â¹1200.
2. Calculating the Selling Price for a 5% Profit:
To earn a 5% profit, the selling price (SP) must be 105% of the cost price (100% + 5% = 105%). We can calculate the required selling price as follows:
SP = 105% of CP
SP = 1.05 * 1200 = â¹1260
Therefore, the bicycle should be sold for â¹1260 to earn a 5% profit.
Conclusion:
In summary, by first calculating the cost price of the bicycle (â¹1200) based on the given 5% loss and â¹1140 selling price, we can then determine the selling price required to achieve a 5% profit. This selling price is calculated to be â¹1260. This problem highlights the importance of understanding cost price and the relationship between cost price, selling price, profit, and loss percentages in making sound financial decisions. Accurate cost accounting and pricing strategies are crucial for the success of any business, ensuring profitability and sustainable growth. This simple example demonstrates a fundamental principle applicable to various financial scenarios, emphasizing the importance of precise calculations in achieving desired financial outcomes.
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