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	<title>PMServicesNW &#187; use margin to calculate price</title>
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		<title>Project Pricing &#8211; Margin</title>
		<link>http://www.pmservicesnw.com/2010/09/project-pricing-margin/</link>
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		<pubDate>Sun, 26 Sep 2010 03:52:46 +0000</pubDate>
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				<category><![CDATA[Cost]]></category>
		<category><![CDATA[Pricing]]></category>
		<category><![CDATA[profit margin]]></category>
		<category><![CDATA[project pricing]]></category>
		<category><![CDATA[use margin to calculate price]]></category>

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		<description><![CDATA[By Ray Myers, Jr., PMP According to the businessdictionary.com, margin is defined to be: the difference between the cost price and the selling price of a product.  In other words, margin is the profit earned on a business transaction. Margin is usually measured as a percentage of the selling price.  Thus the project manager might say, “We earned 30% margin on this project.”  There are 2 margin calculation formulas that every project manger involved with project pricing should know.   Use Margin to Calculate Sell Price Use this formula to calculate the selling price of a product or service when the cost and desired margin is known.  For the purpose of this example, assume the hourly cost is $100 and you want to calculate a selling price with 30% margin. Sell Price = Cost / (1 – Margin) Sell Price = $100 / (1 &#8211; .30) = $142.85 per hour   Calculate Profit in Terms of Margin Use this formula to determine the profit margin you earned on a project when the project cost and sell price is known.  Assume that your project cost $700 and you sent a $1,000 invoice to your client.  What was your profit margin? Margin [...]]]></description>
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