Why doesn’t a 20% discount followed by a 20% markup get you back to where you started?
The 20% discount is taken from the original price, while the 20% markup is calculated from the price after the discount. For example, a 20% discount from $100 gets you to $80, but a 20% markup from $80 gets you to $96. In other words 20% of $80 is less than 20% of $100.
How do companies make a profit?
Companies make a profit by making revenue greater than their costs. A company can maxizise profit by applying discounts and markups (which affect demand) to find an optimal retail price. A company can also increase profit by cutting costs.
Is it possible for everyone to win in the marketplace?
No. Although consumers would like to buy things advertised as discounts, most retail prices are still ridiculously higher than the wholesale price even after discounts. Companies benefit from the increased demand, and although consumers might think they are benefitting from the discounts, they are actually paying unreasonably high prices.
What were the two big “take aways” from Managing Markups assessment?
This assessment was more about reading the task sheet rather than performing the calculations. One of the main take aways from this assessment was to make sure to read and re-read every word of the instructions. It’s really easy to miss a small detail or requirement, which could prove costly. I also remembered to review the task sheet after I finished to check for things that I might’ve missed.
Another take away from this assessment was learning how to use Excel. Through this assessment I’ve learnt many tricks and quirks to help me perform calculations quicker (e.g. fill down, using formulas). This will definitely help me when the time comes to do another project using Excel, be it math related or not.
How have you become a more educated investor? Be specific about how you would invest your money.
I’ve done the managing markups assessment from a company’s point of view — making choices so that a company will make revenue and ultimately maximize profit. As an investor, I would look for signs that a company has been making educated decisions on maximizing their profit (through research). I might also check if said company has fared well in the past during periods of financial crisis (e.g. 2008) which could be a sign that it has an effective contingency plan in place, preventing catastrophic consequences in the future should more crises arise. I would invest money in companies that meet all of these criteria.
Describe, with examples, how you improved some of your math skills.
I haven’t really improved or learned any percentage math skills, but I’ve definitely solidified some basic concepts through this assessment. However, I think I’ve improved my ability in drawing connections between math and real life contexts. For example, I’ve outlined factors that may affect the costs required in running a company (a link to real life), and I’ve also investigated some of those costs using data (applying math skills). After all, it’s assuring to know that the things we learn in math class actually have uses in real life (ok, not everything, but some things!).
Overall a pretty solid percentages unit for me. Looking forward to limits and derivatives next! Or wait, is it vectors? *Checks Moodle* Oh, it’s geometry. Oops.