# Net multiplier formula

@coachhayleypugh
Which is correct:
Net multiplier = breakeven rate / the inverse of target profit
or
Net multiplier = breakeven rate / the inverse of profit multiplier
Both are not correct because my answers aren’t the same.

or is it:
Net multiplier = breakeven rate + profit multiplier

@coachhayleypugh @ngolban practice-quiz practice management
I also have a question on net multiplier. One question on the PCM Quiz Break 6 asks to find the billing rate for an employee. To do this you have to find the Net Multiplier.

The correct answer is found with NM = Breakeven rate + Profit Multiplier. Using this formula the NM = 2.85 and the correct answer to the question is shown to be \$120.89

However in the AHPP on page 410 it says the Net Multiplier = ratio of Net Operating Revenue to Total Direct Labor. If Net Multiplier is found this way the NM = 2.27 and the answer to the question would be \$96.29, which is said to be incorrect.

I don’t understand why calculating the NM according to the AHPP formula returns an incorrect answer. What am I missing? Thanks for any clarification.

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@coachhayleypugh
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@coachkatebarbaria
or anyone else…