CMA Final · Strategic Financial Management · Digital Finance
Aarav Pay, a payments startup, processes 40,000 transactions a day at an average ticket of Rs 1,500. Its revenue is a 0.5% merchant discount rate on value, and its variable cost is Rs 4 per transaction. Fixed costs are Rs 3,00,000 per month. Taking 30 days in a month, what is the monthly operating profit?
This question's data does not reconcile with its options, so it should not be used as written.
- ARs 5,40,000Correct
- BRs 4,20,000
- CRs 3,60,000
- DRs 6,00,000
Explanation
Revenue per transaction = 1,500 x 0.5% = Rs 7.50. Contribution = 7.50 - 4 = Rs 3.50. Monthly transactions = 40,000 x 30 = 12,00,000; contribution = 42,00,000... check: 12,00,000 x 3.50 = Rs 42,00,000? No, 12,00,000 x 3.5 = 42,00,000 is wrong; it equals 4,200,000 = Rs 42 lakh. Subtracting fixed Rs 3 lakh gives Rs 39 lakh, which is not listed; hence reconsider is impossible.
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