When to multiply by (1+profit) and when to instead divide by (1-profit)

Thursday's 6pm ET Zoom study session is titled, “When to multiply by (1+profit) and when to instead divide by (1-profit)” You’ll take the first five minutes of class to answer the question alone, but if you would like to get a head-start on that, here is the assignment.

An architecture firm has the following financial structure for projects:

Overhead multiplier: 1.6

Break-even multiplier: 2.6

Profit: 25%

The direct costs incurred by the firm to design a factory came to $1.2 million. How much should the client be invoiced for in total?

Please don’t post your answer.

The Zoom study session will take place at 6pm ET Thursdays in our Zoom link: https://us02web.zoom.us/j/83922907346

It’s free for everyone, so join us. You’ll increase your odds of passing the exam. . . Plus, it’s fun.