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Mathematics Formulas that Businesses Need

1. One challenge you face on a daily basis in business is calculating decision-making information when you know only part of the information. You must know how much you need to determine how changes in sales will affect the bottom line. If you know your fixed costs (FC), your variable costs per unit (VCu), your price per unit (P), and the number of units (U) sold, you can use a mathematical equation to determine your net income (NI). In this case the formula is:

NI = [U * (P-VCu)] - FC

Find another problem a classmate has not already used that you may need to solve in business, as well as the mathematical formula. What is the formula, and what are the variables? Why do you need to use this shorthand so much in business?

2. Using the formula NI = [U * (P-VCu)] - FC, what is the order in which you need to do the calculation? Why does it matter?

3. In management, how important is it that you learn to use mathematics to solve problems? How valuable is an MBA degree without the ability to identify the cost of a company's capital, its return on investment, gross margin percentage, break-even point, or what percent of a population would be willing to buy its product?

Solution Preview

1. Find another problem a classmate has not already used that you may need to solve in business, as well as the mathematical formula. What is the formula, and what are the variables? Why do you need to use this shorthand so much in business?

Another problem that businesses may use is called the Break Even Analysis. This is the point where the sales and the costs equal to zero, or they break even. After the break-even point is where the profits begin. It is important to use because it lets you know how much you will need to sell before you receive profit and after you figure it out, you can find ways to lower ...

Solution Summary

We had to use a business formula that is useful for business owners and state it's variables. We also had to state the order of operations in a given formula. This solution is 287 words with one APA reference.

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