Question

Bill owns a company (Bill’s Gates) that manufactures fence panels. Bill’s Gates had a net profit margin last quarter of 18%. Which of the following actions will not help Bill increase his net profit margin this year, assuming he sells the same number of fence panels?
a.
Increase the price per panel.
b.
Use cheaper lumber to construct panels.
c.
Offer panels in a “buy one get one free” special.
d.
Reduce workforce and labor costs to construct panels.


Please select the best answer from the choices provided

A
B
C
D

Answer 1

C

Offering a "buy one get one free" reduces revenue per panel (with the same number sold), lowering net profit and thus net profit margin, whereas the other options either raise revenue or lower costs.