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An importer wants to purchase N high quality cameras from Ge

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An importer wants to purchase N high quality cameras from Ge [#permalink] New post 11 Aug 2014, 10:34
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  65% (hard)

Question Stats:

68% (02:00) correct 32% (02:29) wrong based on 62 sessions
An importer wants to purchase N high quality cameras from Germany and sell them in Japan. The cost in Germany of each camera is E euros. He will sell them in Japan at Y yen, which will bring in a profit, given that the exchange rate is C yen per euro. Given the exchange rate of D US dollars per euro, which of the following represents his profit in dollars?
(A) N(YC - DE)
(B) ND(YC - E)
(C) ND[(Y/C) - E]
(D) N[(Y/C) - DE]
(E) ND(Y - E)/C


For the OE to this problem, as well as a discussion of GMAT problems on Ratios & Rates, see:
http://magoosh.com/gmat/2014/rates-and-ratios/

Mike :-)
[Reveal] Spoiler: OA

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An importer wants to purchase N high quality cameras from Ge [#permalink] New post 11 Aug 2014, 13:37
mikemcgarry wrote:
An importer wants to purchase N high quality cameras from Germany and sell them in Japan. The cost in Germany of each camera is E euros. He will sell them in Japan at Y yen, which will bring in a profit, given that the exchange rate is C yen per euro. Given the exchange rate of D US dollars per euro, which of the following represents his profit in dollars?
(A) N(YC - DE)
(B) ND(YC - E)
(C) ND[(Y/C) - E]
(D) N[(Y/C) - DE]
(E) ND(Y - E)/C

For the OE to this problem, as well as a discussion of GMAT problems on Ratios & Rates, see:
http://magoosh.com/gmat/2014/rates-and-ratios/

Mike :-)


I think the BOLD text "He will sell them in Japan" should be "He will sell each of them in Japan". If he sells them ( all of N cameras) at Y yen, the answer will change a lot.

If he sell each of them at Y Yen, here is my solution:
Costs in Euro: E * N ( Euro)
Sales in Yen: N*Y (Y) --> Sales in Euro = N*Y/C (Y)
Profit: Sales - Costs = N*Y/C - E*N (Euro)
--> profit in USD = D*(N*Y/C - E*N) = D*N*(Y/C-E)

Answer is C
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Re: An importer wants to purchase N high quality cameras from Ge [#permalink] New post 13 Aug 2014, 21:55
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Purchase from Germany

Quantity = n

Price = e euro

Total Cost = ne .............. (1)

Sell in Japan

Quantity = n

Price = y yen = \frac{y}{c} euro

Total Sell = \frac{ny}{c} ..................... (2)

Total Profit (In Euro) = (2) - (1)

= \frac{ny}{c} - ne

Total Profit (In Dollars)

= d(\frac{ny}{c} - ne)

= nd(\frac{y}{c} - e)

Answer = C
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Re: An importer wants to purchase N high quality cameras from Ge [#permalink] New post 13 Aug 2014, 22:12
[quote="mikemcgarry"]An importer wants to purchase N high quality cameras from Germany and sell them in Japan. The cost in Germany of each camera is E euros. He will sell them in Japan at Y yen, which will bring in a profit, given that the exchange rate is C yen per euro. Given the exchange rate of D US dollars per euro, which of the following represents his profit in dollars?
(A) N(YC - DE)
(B) ND(YC - E)
(C) ND[(Y/C) - E]
(D) N[(Y/C) - DE]
(E) ND(Y - E)/C


Let us plug in:
N = 4, E = 3, Y = 8, C = 2, D = 2
The exchange rate is 2 yen per euro which means every euro is equal to 2 yen.
Cost 3 x 2 = 6 Yen
Revenue = 8 Yen
Profit per unit = 2 Yen
Total Profit = 2 x 4 = 8 Yen which is equal to 4 Euros
The exchange rate is 2 $ per euro hence the profit is 8 $.
Hence our target is 8:

(A) N(YC - DE) = 4 (16 - 6) ELIMINATED
(B) ND(YC - E) = 8 (16 - 3) ELIMINATED
(C) ND[(Y/C) - E] = 8 (4 - 3) = 8
(D) N[(Y/C) - DE] = 4 ( 4 - 6) ELIMINATED
(E) ND(Y - E)/C[/color] = 8 (5)/(2) ELIMINATED
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Re: An importer wants to purchase N high quality cameras from Ge   [#permalink] 13 Aug 2014, 22:12
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