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A clothing store's revenue last May was 6 percent less than

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A clothing store's revenue last May was 6 percent less than [#permalink]

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15 Dec 2012, 14:46
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A clothing store's revenue last May was 6 percent less than its revenue last April. The store's revenue last May was greater than its expenses last May, and the store's revenue last April was greater than its expenses last April. Was the stores gross profit last May less than its gross profit last April?

(1) The stores revenue last May was $2,400 less than its revenue last April. (2) The stores expenses last May were 4 percent less than its expenses last April. [Reveal] Spoiler: OA Last edited by Bunuel on 16 Dec 2012, 09:28, edited 1 time in total. Renamed the topic and edited the question. Intern Joined: 17 May 2014 Posts: 40 Followers: 0 Kudos [?]: 25 [5] , given: 3 Re: A clothing store's revenue last May was 6 percent less than [#permalink] Show Tags 18 May 2014, 20:35 5 This post received KUDOS mun23 wrote: A clothing store's revenue last May was 6 percent less than its revenue last April. The store's revenue last May was greater than its expenses last May, and the store's revenue last April was greater than its expenses last April. Was the stores gross profit last May less than its gross profit last April? (1) The stores revenue last May was$2,400 less than its revenue last April.
(2) The stores expenses last May were 4 percent less than its expenses last April.

The easiest way out is to put the alphabetical statements in the form of equations in as minimum variables as possible.

Let us assume the revenue for April = R
Revenue for May therefore is = 0.94 R

Let the expense for April = EA
Let the expense for May = EM

We are not given any relationship between EA and EM

But we also know that R > EA

Now what we are asked is:

R- EA > 0.94 R - EM

or

0.06 R > EA - EM

1) The stores revenue last May was $2,400 less than its revenue last April. This statement does not tell us any relationship between EA and EM which is required to solve the inequality. Hence, it is not sufficient. 2) The stores expenses last May were 4 percent less than its expenses last April. It says EM = 0.96 EA Therefore, we get EA - EM = 0.04 EA Hence, out inequality can be reduced to 0.06 R > 0.04 EA or R> 2/3 EA Since we already know R> EA, it has to be greater than 2/3 EA. Hence, this statement is sufficient to answer the question. Therefore B as an answer. Hope it helps!!! Kudos if you find it useful!!!!! VP Joined: 08 Apr 2009 Posts: 1182 Concentration: General Management, Strategy Schools: Duke (Fuqua) - Class of 2012 Followers: 36 Kudos [?]: 423 [4] , given: 19 Re: A clothing stores revenue last May was 6 [#permalink] Show Tags 14 Jan 2013, 20:36 4 This post received KUDOS jgomey wrote: I did the same, but selecting values for this question made me feel vulnerable to a yes/no outcome, so I was looking for an algebraic explanation. Also, the question indicates that revenue is greater than expense for both months, so I don't think you can end up a with a negative value for May. These numbers work a bit better for your first example. May: Revenue = 1000 Exp = 200 April: Revenue= 940 Exp= 192 Now that I think about it, I may have just answered my own question! Thought about it a bit more. Simplifying algebraically: .94R-.96E = .94R-.94E-.02E = .94(R-E)-.02E Since we are subtracting, we assume E is positive (-E is negative). R-E > .94 (R-E) ALWAYS (given R-E is positive). Thus, R-E > 0.94 (R-E) – 0.02E Current Student Status: Everyone is a leader. Just stop listening to others. Joined: 22 Mar 2013 Posts: 993 Location: India GPA: 3.51 WE: Information Technology (Computer Software) Followers: 158 Kudos [?]: 1253 [3] , given: 226 Re: A clothing store's revenue last May was 6 percent less than [#permalink] Show Tags 15 Sep 2014, 05:49 3 This post received KUDOS mun23 wrote: A clothing store's revenue last May was 6 percent less than its revenue last April. The store's revenue last May was greater than its expenses last May, and the store's revenue last April was greater than its expenses last April. Was the stores gross profit last May less than its gross profit last April? (1) The stores revenue last May was$2,400 less than its revenue last April.
(2) The stores expenses last May were 4 percent less than its expenses last April.

Solution :
Statement (1) is not sufficient.

Statement (2) is sufficient, refer following figure.

Attachment:

Revenue.jpg [ 65.5 KiB | Viewed 4945 times ]

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A clothing store's revenue last May was 6 percent less than [#permalink]

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05 Aug 2015, 11:33
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Given:
a) $$R_m=0.94*R_a$$
b) $$R_m>E_m$$
c) $$R_a>E_a$$
Legend: m = March, a = April

Question:
Is $$P_m<P_a$$?
OR is $$R_m-E_m<R_a-E_a$$? (Since, Profits = Revenues - Expenses)
OR is $$E_a-E_m<0.06*R_a$$? (Re-arranging and using info from a) above)....Lets call this as (d)

Statement 1) $$R_m = R_a- 2400$$
Substituting this value in a), we get:
$$R_a - 2400 = 0.94 * R_a$$
$$0.06*R_a = 2400$$
$$R_a = 40,000$$

Substituting this in Question inequality of (d), the question becomes:
Is $$E_a-E_m < 0.06*40000$$?
Or is $$E_a-E_m<2400$$
But we don't know the value of$$E_a$$ OR $$E_m$$ to say this for sure. INSUFFICIENT.

Statement 2) $$E_m=0.96*E_a$$
Then Question inequality of (d) becomes:
Is $$0.04*E_a < 0.06 * R_a$$?
OR is $$E_a < 1.5*R_a$$?

Now from (c) we know that $$E_a < R_a$$
So $$E_a < 1.5*R_a$$ definitely. SUFFICIENT.

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Re: A clothing store's revenue last May was 6 percent less than [#permalink]

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12 May 2013, 08:59
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Stmt 1 - Insuff clearly

Stmt 2 -
April May
Revenue------------ R 0.94R
Expense------------ E 0.96E

Given - R>E
Question - is Profit in May < Profit in April ( i.e 0.94R-0.96E < R-E ?)
Simplifying the above , we get is 4E>6R ? Ans is NO since R>E . Sufficient
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Re: A clothing stores revenue last May was 6 [#permalink]

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16 Dec 2012, 07:34
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mun23 wrote:
A clothing stores revenue last May was 6 percent less than its revenue last april.The stores revenue last may was greater than its expenses last may, and the stores revenue last april was greater than its expenses last april.Was the stores gross profit last may less than its gross profit last april?
(A)The stores revenue last may was $2400 less than its revenue last april (B)The stores expense last May were 4%less than its expense last april Need details explanation.......... If you find this post helpful plz give +1 kudos Gross Profit = Revenue - Expense Revenue > Expense as given for both months. Revenue Expense April R E May .94R .96E Is R - E > .94R - .96E Yes. OA B. _________________ --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Please +1 KUDO if my post helps. Thank you. Manager Joined: 21 Sep 2012 Posts: 219 Location: United States Concentration: Finance, Economics Schools: CBS '17 GPA: 4 WE: General Management (Consumer Products) Followers: 3 Kudos [?]: 153 [1] , given: 31 A clothing store's revenue last May was 6 percent less than [#permalink] Show Tags 02 Dec 2014, 10:09 1 This post received KUDOS Let x be the revenue for April. Therefore revenue for May is 0.94x. Let y be the cost for April. We are asked whether GP for May is less that GP for April? Gross Profit = Revenue - Cost GP for April = (x-y) Change in revenue and change in cost will impact GP. In comparison to April, May has seen reduction in both cost and revenue. In order for GP of May to be less than that of April, reduction in revenue has to be greater than reduction in cost. so we can rephrase the question as is reduction in revenue > reduction in cost ? statement 1 :- The stores revenue last May was$2,400 less than its revenue last April.
No information about cost is given. statement in insufficient.

statement 2 :- The stores expenses last May were 4 percent less than its expenses last April.
Therefore cost for May is 0.96y.
We want to find whether
is reduction in revenue > reduction in cost ?
is 0.6x(reduction in revenue)>0.4y(reduction in cost)
x/y>0.4/0.6
x/y>2/3 ....... ?

In the question it is given that the store's revenue last April was greater than its expenses last April.
so x/y has to be greater that 1.
Therefore x/y is greater that 2/3 and hence GP for May is less than that for April.
Statement is sufficient.

Ans - B
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Re: A clothing store's revenue last May was 6 percent less than [#permalink]

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10 Jan 2013, 03:20
mun23 wrote:
A clothing store's revenue last May was 6 percent less than its revenue last April. The store's revenue last May was greater than its expenses last May, and the store's revenue last April was greater than its expenses last April. Was the stores gross profit last May less than its gross profit last April?

(1) The stores revenue last May was $2,400 less than its revenue last April. (2) The stores expenses last May were 4 percent less than its expenses last April. Bunuel can you chime in. I am struggling to understand the OE. VP Joined: 08 Apr 2009 Posts: 1182 Concentration: General Management, Strategy Schools: Duke (Fuqua) - Class of 2012 Followers: 36 Kudos [?]: 423 [0], given: 19 Re: A clothing stores revenue last May was 6 [#permalink] Show Tags 10 Jan 2013, 09:46 BangOn wrote: mun23 wrote: A clothing stores revenue last May was 6 percent less than its revenue last april.The stores revenue last may was greater than its expenses last may, and the stores revenue last april was greater than its expenses last april.Was the stores gross profit last may less than its gross profit last april? (A)The stores revenue last may was$2400 less than its revenue last april

(B)The stores expense last May were 4%less than its expense last april

I think this one is pretty difficult. My math isn't that good, so I had to use a plug-n-chug method.

Given the below equations:
Gross Profit = Revenue - Expense
Revenue > Expense as given for both months.

Revenue Expense
April R E
May .94R .96E

Is R - E > .94R - .96E ?

Assume some extreme cases:
Case 1: R=1000 | E=999.99
R-E = 0.01 | .94R-.96E = -19.99 | April > May
Case 2: R=1000 | E=0
R-E = 1000 | .94R-.96E = 940 | April > May

So no matter what, April always greater than may.
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Re: A clothing stores revenue last May was 6 [#permalink]

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11 Jan 2013, 17:55
asimov wrote:
BangOn wrote:
mun23 wrote:
A clothing stores revenue last May was 6 percent less than its revenue last april.The stores revenue last may was greater than its expenses last may, and the stores revenue last april was greater than its expenses last april.Was the stores gross profit last may less than its gross profit last april?
(A)The stores revenue last may was \$2400 less than its revenue last april

(B)The stores expense last May were 4%less than its expense last april

I think this one is pretty difficult. My math isn't that good, so I had to use a plug-n-chug method.

Given the below equations:
Gross Profit = Revenue - Expense
Revenue > Expense as given for both months.

Revenue Expense
April R E
May .94R .96E

Is R - E > .94R - .96E ?

Assume some extreme cases:
Case 1: R=1000 | E=999.99
R-E = 0.01 | .94R-.96E = -19.99 | April > May
Case 2: R=1000 | E=0
R-E = 1000 | .94R-.96E = 940 | April > May

So no matter what, April always greater than may.

I did the same, but selecting values for this question made me feel vulnerable to a yes/no outcome, so I was looking for an algebraic explanation. Also, the question indicates that revenue is greater than expense for both months, so I don't think you can end up a with a negative value for May.

These numbers work a bit better for your first example.

May: Revenue = 1000 Exp = 200
April: Revenue= 940 Exp= 192

Now that I think about it, I may have just answered my own question!
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Re: A clothing store's revenue last May was 6 percent less than [#permalink]

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18 May 2014, 16:00
Actually found my way of doing it. Follow me ok?
APR MAY
Rev X 0.94X
Exp Z Y
Profits X-Z> 0.94X+Y?

Is 0.06x>Z+Y?

We also know that '0.94x>y' and that 'x>z'
Statement 1

0.06X = 2400

We can find the value of 'x' here but we still don't know if its greater

For instance if y=0.93x and z=0.93x then answer is NO

If y=0.01x and z=0.01x answer is YES

This is even without knowing the value of X since 'X' must be a positive number

Staetment 2

y=0.96z therefore we have that

0.06x>0.04z?

6x>4z ---> 3x>2z?

Well, since both numbers must be positive and since x>z then answer to this is YES

Hence sufficient

Hope this clarifies
Kudos if you like

Last edited by jlgdr on 20 May 2014, 05:34, edited 1 time in total.
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Re: A clothing store's revenue last May was 6 percent less than [#permalink]

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26 Nov 2014, 23:35
gmacforjyoab wrote:
Stmt 1 - Insuff clearly

Stmt 2 -
April May
Revenue------------ R 0.94R
Expense------------ E 0.96E

Given - R>E
Question - is Profit in May < Profit in April ( i.e 0.94R-0.96E < R-E ?)
Simplifying the above , we get is 4E>6R ? Ans is NO since R>E . Sufficient

Isn't the answer to the question yes, it is less.
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Re: A clothing store's revenue last May was 6 percent less than [#permalink]

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17 Jan 2015, 12:55
Ans B

R>E for both months

Profit in April, Pa = Ra-Ea

Profit in May, Pm = Rm-Em

comparing....Revenue decreased by 6% and expenses by 4%

Profit comparision....( bigger no. decreased by more) - (a smaller no. decreased by less) =>overall profit decreased more=> B is sufficient

A

doesnt even connect hw expenses vary...so not sufficient
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Re: A clothing store's revenue last May was 6 percent less than [#permalink]

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27 Jun 2015, 05:44
here is another way to look at statement 2. Already explained but will simplify through algebra...

Let ---------------- --Apr---------------May
Revenue---------- ----X--------------- 0.94X ( given in stem that revenue is 6% less in May)
Expense ---------- ----Y ---------- ----0.96Y ( Given in statement 2 that expense in May is 4% less)

We have to prove is : 0.94X - 0.96 Y > X- Y
(Profit of May is greater than Apr)

We are told that in both months Profit is +ve or greater than zero. Means that X>Y --> X/Y > 1.

now reducing the above equation 0.94X - 0.96 Y > X- Y
we get X/Y < 2/3

Now for (0.94X - 0.96 Y > X- Y) equation to be true, X/Y < 2/3 has to be true.

But we are told X/Y>1 therefore the above equation doesn't hold true.

Hence B.
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Re: A clothing store's revenue last May was 6 percent less than [#permalink]

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