James manufactured his own bicycle brand and needs to set a selling price. The manufacturing cost per bike is $65, and his desired profit margin is 15%. What is James's selling price?

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Multiple Choice

James manufactured his own bicycle brand and needs to set a selling price. The manufacturing cost per bike is $65, and his desired profit margin is 15%. What is James's selling price?

Explanation:
When a profit margin is treated as a markup on cost, the selling price is simply the cost plus 15% of the cost. Calculate 15% of 65: 0.15 × 65 = 9.75. Add that to the cost: 65 + 9.75 = 74.75. So the selling price should be 74.75. If margin were defined as profit as a share of selling price, the math would yield about 76.47, but the typical interpretation here is markup on cost, which matches 74.75.

When a profit margin is treated as a markup on cost, the selling price is simply the cost plus 15% of the cost. Calculate 15% of 65: 0.15 × 65 = 9.75. Add that to the cost: 65 + 9.75 = 74.75. So the selling price should be 74.75. If margin were defined as profit as a share of selling price, the math would yield about 76.47, but the typical interpretation here is markup on cost, which matches 74.75.

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