Assume m = million. Using Year 1 figures: fixed costs $375m; sold 231m Regular at price $4, unit cost $1. Compute Year 1 profit margin defined as Profit/Revenue (in percent) to two decimals, showing each step.

This question evaluates a data scientist's quantitative reasoning about unit economics and financial metrics, including understanding fixed versus variable costs and computing profit margin as a percentage.

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Calculate first-year profit margin | Capital One Interview Question

Profit Margin Calculation (Year 1)

Context: A single product is sold in Year 1. m denotes million.

Given:

Fixed costs: $375m
Units sold (Regular): 231m
Price per unit: $4
Unit variable cost: $1

Task:

Compute the Year 1 profit margin, defined as Profit / Revenue, expressed as a percentage to two decimals. Show each step.

Calculate first-year profit margin

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Profit Margin Calculation (Year 1)

Solution

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