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In 2000, Gregory's Grocery had a total of 50 stores in the

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In 2000, Gregory's Grocery had a total of 50 stores in the [#permalink] New post 07 Oct 2011, 10:39
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A
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C
D
E

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In 2000, Gregory's Grocery had a total of 50 stores in the United States and reported
profits of $50 million in 2000. During the next five years, the chain added 20 stores per
year for a total of 150 stores in the United States and Canada in 2005. Profits increased
each year at a rate of 10 percent.
Which of the following can be concluded based on the passage above?
A. The stores in Canada were not as profitable as those in the United States.
B. Between 2000 and 2005, average revenue per store decreased.
C. On average, the stores were less profitable in 2005 than in 2000.
D. Profit per store, or average profit, will continue to decrease if the chain continues to
expand the number of stores.
E. If Gregory’s Grocery shuts down some of its stores, average profitability will increase.

Per the question stem...arn't the stores more profitable in 2005 than in 2000? or am i missing something...pls help explain..
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Re: Gregory's Grocery!! [#permalink] New post 07 Oct 2011, 12:23
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DeeptiM wrote:
In 2000, Gregory's Grocery had a total of 50 stores in the United States and reported
profits of $50 million in 2000. During the next five years, the chain added 20 stores per
year for a total of 150 stores in the United States and Canada in 2005. Profits increased
each year at a rate of 10 percent.
Which of the following can be concluded based on the passage above?
A. The stores in Canada were not as profitable as those in the United States.
B. Between 2000 and 2005, average revenue per store decreased.
C. On average, the stores were less profitable in 2005 than in 2000.
D. Profit per store, or average profit, will continue to decrease if the chain continues to
expand the number of stores.
E. If Gregory’s Grocery shuts down some of its stores, average profitability will increase.

Per the question stem...arn't the stores more profitable in 2005 than in 2000? or am i missing something...pls help explain..


C)
In 2000: 50 stores; 50$ profit; Average profit=1
In 2001: 70 stores; 55$ profit; Average profit=55/70<1
In 2002: 90 stores; 61$ profit; Average profit=61/90<1 and also less than previous.
So, the average profit per store is decreasing.

B) Sole possible contender.
We know nothing about the revenue; So, we can't comment.

2000; Expenditure=50 million; Revenue=100 mill; Profit= 50 mil
2001; Expenditure=200 million; Revenue=255 mill; Profit= 55 mil
OR
2001; Expenditure=1 million; Revenue=56 mill; Profit= 55 mil

We saw that revenue could have increased or decreased. So, not must be true.

Ans: "C"
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Re: Gregory's Grocery!! [#permalink] New post 07 Oct 2011, 12:32
I think it's 'C' .
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Re: Gregory's Grocery!! [#permalink] New post 08 Oct 2011, 20:24
It's C, I actually did a quick mental calculation of profits earned each year but I don't think it's necessary.

Good explanation fluke, I spent more than 1.5 min calculating profits, what a waste of time :(
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Re: In 2000, Gregory's Grocery had a total of 50 stores in the [#permalink] New post 01 Sep 2013, 15:09
Why is D wrong again? Isnt D kinda same as C? What am I missing here?
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Re: In 2000, Gregory's Grocery had a total of 50 stores in the [#permalink] New post 04 Sep 2013, 03:30
It should be D i think bcoz as per calculation..
avg profit in 2000 50/50 = 1
avg profit in 2001 (50+5)/50+20 < 1
avg profit in 2002 (55+5.5)/90 < 1.....

its decreasing in this manner....
whereas in C,it is not clear what we mean by avg profit.The stores might be profitable compared to previous yeras and still the profit per store might come out less.
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Re: In 2000, Gregory's Grocery had a total of 50 stores in the [#permalink] New post 05 Sep 2013, 04:42
Expert's post
This is an inference question so you evaluate whether the answers must be true based on the facts provided in the paragraph, any answers with information outside the scope of the paragraph cannot be the answer.
DeeptiM wrote:
In 2000, Gregory's Grocery had a total of 50 stores in the United States and reported
profits of $50 million in 2000. During the next five years, the chain added 20 stores per
year for a total of 150 stores in the United States and Canada in 2005. Profits increased
each year at a rate of 10 percent.
Which of the following can be concluded based on the passage above?
A. The stores in Canada were not as profitable as those in the United States.[color=#ff0000]We don't have any information for comparing Canada to United States, we only know that profit increased by 10% [/color]
B. Between 2000 and 2005, average revenue per store decreased.We are only told about profit, not revenue so this cannot be the answer
C. On average, the stores were less profitable in 2005 than in 2000.This must be true, especially considering it is discussing average you do not have to do the calculations but you can determine that if profit went up only 10% and the number of stores more than doubled that the average profit per store has gone down
D. Profit per store, or average profit, will continue to decrease if the chain continues to
expand the number of stores.information about the future is out of scope because the argument does not make any claims about what will happen in the future, this is certainly a possibility but it does not have to be true
E. If Gregory’s Grocery shuts down some of its stores, average profitability will increase.Same as D, we do not know what will happen if Gregory's closes stores thus future events are out of scope

Per the question stem...arn't the stores more profitable in 2005 than in 2000? or am i missing something...pls help explain..

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Re: In 2000, Gregory's Grocery had a total of 50 stores in the [#permalink] New post 05 Sep 2013, 10:43
aisaKyu wrote:
It should be D i think bcoz as per calculation..
avg profit in 2000 50/50 = 1
avg profit in 2001 (50+5)/50+20 < 1
avg profit in 2002 (55+5.5)/90 < 1.....

its decreasing in this manner....
whereas in C,it is not clear what we mean by avg profit.The stores might be profitable compared to previous yeras and still the profit per store might come out less.



Choosing D would be based on hypothesis and not based on the info available. Option C, however, is clearly based on the available info.
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Re: In 2000, Gregory's Grocery had a total of 50 stores in the [#permalink] New post 05 Sep 2013, 11:05
Expert's post
suyash23n wrote:
aisaKyu wrote:
It should be D i think bcoz as per calculation..
avg profit in 2000 50/50 = 1
avg profit in 2001 (50+5)/50+20 < 1
avg profit in 2002 (55+5.5)/90 < 1.....

its decreasing in this manner....
whereas in C,it is not clear what we mean by avg profit.The stores might be profitable compared to previous yeras and still the profit per store might come out less.



Choosing D would be based on hypothesis and not based on the info available. Option C, however, is clearly based on the available info.


D Discusses future events - which can never be 100% guaranteed unless the paragraph says they are. There are many things which could influence the trend and make D not necessarily true. C does not discuss the future but events which have already occurred and is thus a proper inference.
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Re: In 2000, Gregory's Grocery had a total of 50 stores in the [#permalink] New post 05 Sep 2013, 19:57
Expert's post
DeeptiM wrote:
In 2000, Gregory's Grocery had a total of 50 stores in the United States and reported
profits of $50 million in 2000. During the next five years, the chain added 20 stores per
year for a total of 150 stores in the United States and Canada in 2005. Profits increased
each year at a rate of 10 percent.
Which of the following can be concluded based on the passage above?
A. The stores in Canada were not as profitable as those in the United States.
B. Between 2000 and 2005, average revenue per store decreased.
C. On average, the stores were less profitable in 2005 than in 2000.
D. Profit per store, or average profit, will continue to decrease if the chain continues to
expand the number of stores.
E. If Gregory’s Grocery shuts down some of its stores, average profitability will increase.



The problem with D is that it could be true or it could be false. Either way is possible and we really don't know. Just because something is trending one way doesn't mean it will be that way forever. The next batch of expansions could be in a very prosperous region and then the profits will double instantly. C must be true based on the facts given, so at the very least we should be able to confirm the math using a couple of quick examples (started by AisaKyu):
avg profit in 2000 50/50 = 1 Million / store
avg profit in 2001 (50+5)/50+20 --) 55/70 --) 0.78
avg profit in 2002 (55+5.5)/90 --) 60.5/90 --) 0.67
...
avg profit in 2005: 80.53 / 150 = 0.54

You don't have to do all the math, just enough to prove to yourself that answer choice C is factually correct.

Hope this helps!
-Ron
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Re: In 2000, Gregory's Grocery had a total of 50 stores in the   [#permalink] 05 Sep 2013, 19:57
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