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GMAT Instructor
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A company makes two types of bicycles, racing bikes and [#permalink]
 18 Apr 2007, 10:00
Question Stats:
0% (00:00) correct
 0% (00:00) wrong based on 0 sessions
A company makes two types of bicycles, racing bikes and mountain bikes. In its 2006 year-end report, the company reported that revenue from mountain bikes sales rose by 5% from 2005 to 2006 and that revenue from racing bike sales rose by 20% during the same period. Did the revenue from racing bike sales exceed 4 million dollars in 2006?
(1) The company's total revenue from bicycle sales in 2006 was between $11 million and $13 million and 10% higher than it was in 2005.
(2) More than 40% of the bicycles that the company sold in 2006 were racing bikes.
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Manager
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C for me.
Take the minimum possible for racing bikes. 40% of 11 Million would be more than 4 Million.
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Manager
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jainvik7 wrote: C for me.
Take the minimum possible for racing bikes. 40% of 11 Million would be more than 4 Million.
I agree C. What is the answer pls?
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Senior Manager
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A for me.
(1) The company's total revenue from bicycle sales in 2006 was between $11 million and $13 million and 10% higher than it was in 2005.
SUFFICIENT
Let T=total revenue, M=revenue from mountain bikes, and R=revenue from racing bikes for Year 2005.
Then for 2006, the figures will be,
1.1T, 1.05M, and 1.20R.
Set up the equations.
M+R=T
1.05M+1.2R=1.1T
1.1T=11~13
Three unknowns, three equations -> solvable.
Let's test the range for the total revenue in 2006.
Let 1.1T=11.
Then, T=10.
Solve M+R=10
1.05M+1.20R=11
R=3.3333 < 4
Let 1.1T=13
Then, T=11.8 approx.
Solve M+R=11.8
1.05M+1.20R=13
R=2.6666 < 4
Therefore, the revenue from racing bike sales did NOT exceed 4 million in 2006.
(2) More than 40% of the bicycles that the company sold in 2006 were racing bikes.
INSUFFICIENT
We don't know how much racing bikes sell for, let alone the total revenue in 2006.
Therefore, A.
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GMAT Club Legend
Joined: 07 Jul 2004
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St1:
Taking the worst case revenue of $11m, we know in in 2005, the revenue was $9.9m
So if revenues of racing bikes = r, then revenues of mountain bikes = 9.9-r
In 2006, revenues of racing bikes = 1.2r and revenues of mountina bikes = 1.05(9.9-r)
So total revenue in 2006 = 1.2r + 1.05(9.9-r) = 11
We can solve for r. Sufficient.
St2:
We are still in the murky region here since all we know is the percentage of racing bikes:mountain bikes sold (in fact, even this figure is murky because we are told more than 40% are racing bikes). Nothing else is revealed. Insufficient.
Ans A
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