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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]

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07 Oct 2011, 11:39
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62% (02:31) correct 38% (01:43) wrong based on 311 sessions

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. [Reveal] Spoiler: OA Math Forum Moderator Joined: 20 Dec 2010 Posts: 2021 Followers: 156 Kudos [?]: 1527 [3] , given: 376 Re: In 2000, Gregory's Grocery had a total of 50 stores in the [#permalink] ### Show Tags 07 Oct 2011, 13:23 3 This post received KUDOS 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" _________________ Intern Joined: 28 Mar 2011 Posts: 9 Followers: 0 Kudos [?]: 6 [0], given: 5 Re: In 2000, Gregory's Grocery had a total of 50 stores in the [#permalink] ### Show Tags 07 Oct 2011, 13:32 I think it's 'C' . Intern Joined: 28 Jun 2011 Posts: 28 Concentration: Operations, International Business GPA: 3.8 WE: Information Technology (Computer Software) Followers: 0 Kudos [?]: 8 [0], given: 0 Re: In 2000, Gregory's Grocery had a total of 50 stores in the [#permalink] ### Show Tags 08 Oct 2011, 21:24 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 Manager Joined: 19 Oct 2012 Posts: 153 Location: India Concentration: General Management, Operations GMAT 1: 660 Q47 V35 GPA: 3.81 WE: Information Technology (Computer Software) Followers: 0 Kudos [?]: 4 [0], given: 28 Re: In 2000, Gregory's Grocery had a total of 50 stores in the [#permalink] ### Show Tags 01 Sep 2013, 16:09 Why is D wrong again? Isnt D kinda same as C? What am I missing here? _________________ Citius, Altius, Fortius Intern Joined: 28 Apr 2013 Posts: 11 Location: India Concentration: Technology, General Management GMAT 1: 660 Q49 V31 GMAT 2: 680 Q47 V35 WE: Consulting (Consulting) Followers: 0 Kudos [?]: 5 [0], given: 3 Re: In 2000, Gregory's Grocery had a total of 50 stores in the [#permalink] ### Show Tags 04 Sep 2013, 04:30 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. Princeton Review Representative Joined: 17 Jun 2013 Posts: 163 Followers: 137 Kudos [?]: 276 [0], given: 0 Re: In 2000, Gregory's Grocery had a total of 50 stores in the [#permalink] ### Show Tags 05 Sep 2013, 05:42 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]

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05 Sep 2013, 11:43
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]

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05 Sep 2013, 12:05
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]

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05 Sep 2013, 20:57
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 _________________ GMAT Club Legend Joined: 01 Oct 2013 Posts: 8832 Followers: 773 Kudos [?]: 160 [0], given: 0 Re: In 2000, Gregory's Grocery had a total of 50 stores in the [#permalink] ### Show Tags 08 Dec 2014, 03:03 Hello from the GMAT Club VerbalBot! Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos). Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email. Director Joined: 18 Oct 2014 Posts: 875 Location: United States GMAT 1: 660 Q49 V31 GPA: 3.98 Followers: 57 Kudos [?]: 126 [0], given: 60 Re: In 2000, Gregory's Grocery had a total of 50 stores in the [#permalink] ### Show Tags 25 Jul 2016, 11:20 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.

Profit in 2000 is given and in 2005 can be calculated.

Split of US and Canada stores is not given

Total stores at the end of each year is known.

A. The stores in Canada were not as profitable as those in the United States. Since we don't know the split between the stores, we can't conclude the profit split between the stores.
B. Between 2000 and 2005, average revenue per store decreased. Cost is not given, and hence revenue can not be calculated.
C. On average, the stores were less profitable in 2005 than in 2000. Hold it as the choice talks about profits.
D. Profit per store, or average profit, will continue to decrease if the chain continues to expand the number of stores. We don't know the trend will continue.
E. If Gregory’s Grocery shuts down some of its stores, average profitability will increase. What if it closes high profit stores. We are not sure about this statement to b true.

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Re: In 2000, Gregory's Grocery had a total of 50 stores in the   [#permalink] 25 Jul 2016, 11:20
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