Question

A company has a 22% profit margin, and has employee fraud of $220,000. Calculate the additional revenue to offset the lost income.

Thanks.

Answer 1

$1,000,000

Answer 2

220,000/22% = 1,000,000

Answer 3

[AI-generated answer — Explain Bot]

To calculate the additional revenue needed to offset the lost income from employee fraud, we first need to determine the amount of profit that was lost due to the fraud.

The profit margin is calculated as a percentage of the revenue. In this case, we know that the profit margin is 22%. This means that for every dollar in revenue, the company earns a profit of 0.22 dollars.

Since we have the amount of fraud, which is $220,000, we can calculate the revenue it represents by dividing it by the profit margin percentage:

Revenue lost = Fraud amount / Profit margin percentage
= $220,000 / 22%
= $1,000,000

Therefore, the company lost $1,000,000 in revenue due to employee fraud.

To offset this lost income, the company would need to generate an additional $1,000,000 in revenue. However, it is important to note that this calculation assumes that all other costs and expenses remain constant, and that the company can generate the additional revenue without affecting its profit margin or increasing its expenses.