Find all School-related info fast with the new School-Specific MBA Forum

It is currently 27 Aug 2014, 11:07

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Tough Question????????????

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
Manager
Manager
User avatar
Joined: 04 Apr 2010
Posts: 165
Followers: 1

Kudos [?]: 52 [0], given: 31

GMAT Tests User
Tough Question???????????? [#permalink] New post 23 Mar 2011, 19:16
00:00
A
B
C
D
E

Difficulty:

  5% (low)

Question Stats:

50% (02:44) correct 50% (01:07) wrong based on 6 sessions
A firm's financial data for 2004-2006 (attached herewith) is given in this chart (all figures in 1000s of $). If the firm's average profits over the period 2004-2012 are $300,000, and its average costs and revenues change by an equal percentage between the two periods, what is the ratio of its revenue in 2004-2006 to its revenue for the years 2007-2012?
A 1/6
B 2/9
C 1/4
D 2/5
E 1/2

I couldn't solve it :(
[Reveal] Spoiler: OA

Attachments

Doc1.docx [14.95 KiB]
Downloaded 124 times

To download please login or register as a user


_________________

Consider me giving KUDOS, if you find my post helpful.
If at first you don't succeed, you're running about average. ~Anonymous

2 KUDOS received
Manager
Manager
avatar
Joined: 03 Mar 2011
Posts: 94
Location: United States
Schools: Erasmus (S)
GMAT 1: 730 Q51 V37
GPA: 3.9
Followers: 1

Kudos [?]: 88 [2] , given: 12

GMAT Tests User
Re: Tough Question???????????? [#permalink] New post 24 Mar 2011, 04:43
2
This post received
KUDOS
In the problem we have 2 periods 2004-2006 (3 years) and 2007-2012 (6 years).
For the first period the average revenue is (1100+700+300)/3=700
The average costs is (400+900+500)/3=600
So, the average profit is 700-600=100
Let assume that both revenue and costs increased in the second period by x percents. Then new average revenue for 2007-2012 is 700(1+x/100), new average costs is 600(1+x/100).
To calculate average profit for the whole total period 2004-2012 we need to sum all revenues, subtract all costs and divide by 9.
Total revenues=3*700+6*700(1+x/100)
Total costs=3*600+6*600(1+x/100)
Total profit=3*100+6*100(1+x/100)
Average profit=Total profit/9=100/3+200/3(1+x/100)
We know that it is equal to 300
100/3+200/3(1+x/100)=300
200(1+x/100)=800
1+x/100=4
x=300

So, both revenue and costs increased by 300% in the second period, thefore the ratio of revenues is 1/4.
The answer is C
_________________

If my post is useful for you not be ashamed to KUDO me!
Let kudo each other!

Manager
Manager
User avatar
Joined: 04 Apr 2010
Posts: 165
Followers: 1

Kudos [?]: 52 [0], given: 31

GMAT Tests User
Re: Tough Question???????????? [#permalink] New post 24 Mar 2011, 05:41
+1 for you bagrettin. Thanks for answering. Is this a GMAT question?
_________________

Consider me giving KUDOS, if you find my post helpful.
If at first you don't succeed, you're running about average. ~Anonymous

Manager
Manager
avatar
Joined: 03 Mar 2011
Posts: 94
Location: United States
Schools: Erasmus (S)
GMAT 1: 730 Q51 V37
GPA: 3.9
Followers: 1

Kudos [?]: 88 [0], given: 12

GMAT Tests User
Re: Tough Question???????????? [#permalink] New post 24 Mar 2011, 07:14
Mmm.
Why not? I suppose that wording on GMAT will be better and more exact.
However, this question is a mix of analyzing of verbal information, ratios, averages and basic economic terms such as revenue or profit. Pretty good for the exam like GMAT.

In any case, you should be able to solve such problems. Be sure you know well how to calculate average of two groups combining together and other stuff like that.

Best wishes!
_________________

If my post is useful for you not be ashamed to KUDO me!
Let kudo each other!

Expert Post
Veritas Prep GMAT Instructor
User avatar
Joined: 16 Oct 2010
Posts: 4687
Location: Pune, India
Followers: 1079

Kudos [?]: 4844 [0], given: 163

Re: Tough Question???????????? [#permalink] New post 24 Mar 2011, 17:57
Expert's post
This is a Data Interpretation question. You could see one or two such questions on the exam. These questions are generally straight forward. You just need to be comfortable with the terminology (Revenue, Cost, Profit etc) and how they are related to each other. But an actual GMAT question would be much clearer and exact.
_________________

Karishma
Veritas Prep | GMAT Instructor
My Blog

Save $100 on Veritas Prep GMAT Courses And Admissions Consulting
Enroll now. Pay later. Take advantage of Veritas Prep's flexible payment plan options.

Veritas Prep Reviews

Director
Director
avatar
Status: Matriculating
Affiliations: Chicago Booth Class of 2015
Joined: 03 Feb 2011
Posts: 931
Followers: 11

Kudos [?]: 190 [0], given: 123

Reviews Badge
Re: Tough Question???????????? [#permalink] New post 02 Apr 2011, 22:03
bagrettin
What is your 30 sec strategy to crack this? Hope I am not asking too much ;-)

bagrettin wrote:
In the problem we have 2 periods 2004-2006 (3 years) and 2007-2012 (6 years).
For the first period the average revenue is (1100+700+300)/3=700
The average costs is (400+900+500)/3=600
So, the average profit is 700-600=100
Let assume that both revenue and costs increased in the second period by x percents. Then new average revenue for 2007-2012 is 700(1+x/100), new average costs is 600(1+x/100).
To calculate average profit for the whole total period 2004-2012 we need to sum all revenues, subtract all costs and divide by 9.
Total revenues=3*700+6*700(1+x/100)
Total costs=3*600+6*600(1+x/100)
Total profit=3*100+6*100(1+x/100)
Average profit=Total profit/9=100/3+200/3(1+x/100)
We know that it is equal to 300
100/3+200/3(1+x/100)=300
200(1+x/100)=800
1+x/100=4
x=300

So, both revenue and costs increased by 300% in the second period, thefore the ratio of revenues is 1/4.
The answer is C
1 KUDOS received
Manager
Manager
avatar
Joined: 03 Mar 2011
Posts: 94
Location: United States
Schools: Erasmus (S)
GMAT 1: 730 Q51 V37
GPA: 3.9
Followers: 1

Kudos [?]: 88 [1] , given: 12

GMAT Tests User
Re: Tough Question???????????? [#permalink] New post 02 Apr 2011, 22:48
1
This post received
KUDOS
I'll tell you that solution will not differ a lot.

0 sec
Average profit 2004-2006=(1100+700+300-400-900-500)/3=300/3=100

10 sec Revenue increases by x, costs increases by x -> profit increases by x

15 sec
Average profit 2004-2012=(3*100+6*100x)/9=300
3+6x=27
6x=24
x=4

25 sec
x=4 -> ratio of revenues is 1/4

30 sec
ANSWER C
_________________

If my post is useful for you not be ashamed to KUDO me!
Let kudo each other!

Director
Director
avatar
Status: Matriculating
Affiliations: Chicago Booth Class of 2015
Joined: 03 Feb 2011
Posts: 931
Followers: 11

Kudos [?]: 190 [0], given: 123

Reviews Badge
Re: Tough Question???????????? [#permalink] New post 02 Apr 2011, 23:35
Bull's eye bagrettin :-) I got the gem I was looking for this line -
Revenue increases by x, costs increases by x -> profit increases by x
VP
VP
avatar
Status: There is always something new !!
Affiliations: PMI,QAI Global,eXampleCG
Joined: 08 May 2009
Posts: 1365
Followers: 11

Kudos [?]: 136 [0], given: 10

GMAT Tests User
Re: Tough Question???????????? [#permalink] New post 29 Apr 2011, 22:09
[(2100+ 4200 *x/100) + (1800 + 3600 * x/100) ] / 9 = 300

will give x = 4.

Hence the ratio is 1/4.
_________________

Visit -- http://www.sustainable-sphere.com/
Promote Green Business,Sustainable Living and Green Earth !!

Re: Tough Question????????????   [#permalink] 29 Apr 2011, 22:09
    Similar topics Author Replies Last post
Similar
Topics:
Tough question Hyppo 6 08 Jun 2011, 05:14
4 Experts publish their posts in the topic Tough question Mikko 3 29 Sep 2010, 22:18
Tough question ldpedroso 1 11 May 2008, 14:25
TOUGH Quant questions... haas_mba07 3 02 Aug 2006, 10:02
7 2 tough verbal questions tieuphpng 10 20 Jun 2006, 20:03
Display posts from previous: Sort by

Tough Question????????????

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.