A company is offering to pay a stadium $750,000 per year for naming rights. If the administrative costs for this sponsorship are $63,000, what are the costs as a percentage of the revenue for the stadium-naming sponsorship? (Round to the nearest percent.)
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Answer:
The cost is 8.4% of the revenue for the stadium.
Step-by-step explanation:
Company offer to pay = $750,000
Administrative costs = $63,000
Revenue = Offer Money (Income) = $750,000
Percentage of Cost with respect to revenue = 100 * cost / revenue.
Substituting the above values in the equation, we get
% of cost with respect to revenue = 100 * 63000 / 750000
= 630/75
= 126 / 15
= 8.4
Hence the cost is 8.4% of the revenue for the stadium.
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