Question

A company is offering to pay a stadium for naming rights. If the administrative costs for this sponsorship are $78,000, and these costs are 8% of the revenue for the naming sponsorship, how much is the company offering to pay for the stadium naming rights?

Answer 1

Answer:

The amount of $71,760  , is offered by the company for the stadium naming rights.

Explanation:

As the total cost for the sponsorship is $78,000 but the cost has 8% revenue for the naming sponsorship. Therefore,

= Amount × % of revenue

= $78,000 × 8%

= $6,240

In order to compute the amount which is offered to pay for the stadium rights, the revenue amount to be deducted from the administrative cost:

= Cost - Revenue

= $78,000 - $6,240

= $71,760