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Grocery store's profit equals sales minus the cost and taxes

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Intern
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Joined: 11 Apr 2012
Posts: 42
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Grocery store's profit equals sales minus the cost and taxes [#permalink] New post 28 Aug 2012, 22:04
00:00
A
B
C
D
E

Difficulty:

  35% (medium)

Question Stats:

66% (01:49) correct 34% (01:03) wrong based on 59 sessions
Grocery store's profit equals sales minus the cost and taxes. By what percent did the grocery store's profit changed on July 25,2005 When sales, cost, and taxes all increased?

(1) Grocery store's sales increased by 5 percent on july 25,2005.
(2) Grocery store's cost and taxes increased by 25 percent on July 25,2005.
[Reveal] Spoiler: OA
Director
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Re: Grocery store's profit equals sales minus the cost and taxes [#permalink] New post 28 Aug 2012, 23:02
vinay911 wrote:
Grocery store's profit equals sales minus the cost and taxes. By what percent did the grocery store's profit changed on July 25,2005 When sales, cost, and taxes all increased?

(1) Grocery store's sales increased by 5 percent on july 25,2005.
(2) Grocery store's cost and taxes increased by 25 percent on July 25,2005.


P - profit
S - sales
C - cost
T - taxes
So, P = S - (C + T)

(1) & (2) obviously neither one sufficient alone

(1) and (2) together:

\(\frac{P_{new}}{P_{old}}=\frac{1.05S-1.25(C+T)}{S-(C+T)},\) again not sufficient.

Answer E
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Joined: 06 Jun 2011
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Location: India
Concentration: International Business, Marketing
GMAT Date: 10-09-2012
GPA: 3.2
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Re: Grocery store's profit equals sales minus the cost and taxes [#permalink] New post 30 Aug 2012, 19:45
depending on the numbers the percentages will change and when there are same figures for both one and two this can happen

if not this will not happen
as no such condition is given this cannot happen

so i dont think we further need to solve it but straight forward go with e
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Joined: 28 Aug 2012
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Location: Austria
GMAT 1: 770 Q51 V42
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Re: Grocery store's profit equals sales minus the cost and taxes [#permalink] New post 31 Aug 2012, 05:51
Cost and taxes could be low compared to sales and thus the 25% increase doesn't bother us much and we get to keep most of the 5% increase in sales. Or cost and taxes are high and thus the 25% increase is more than the increase in sales.

So we can't even say, whether profits are growing or shrinking.
Re: Grocery store's profit equals sales minus the cost and taxes   [#permalink] 31 Aug 2012, 05:51
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