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# A certain business spends 1/2 of its revenue on payroll, 1/4 on invent

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Posts: 54493
A certain business spends 1/2 of its revenue on payroll, 1/4 on invent  [#permalink]

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27 Mar 2017, 03:51
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5% (low)

Question Stats:

89% (01:05) correct 11% (01:52) wrong based on 105 sessions

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A certain business spends 1/2 of its revenue on payroll, 1/4 on inventory, and 1/5 on healthcare. If the remaining \$200,000 of revenue is issued as dividends, what is the business's total revenue?

A. \$2 million
B. \$3 million
C. \$4 million
D. \$4.5 million
E. \$5 million

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Re: A certain business spends 1/2 of its revenue on payroll, 1/4 on invent  [#permalink]

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27 Mar 2017, 08:41
1
Top Contributor
Bunuel wrote:
A certain business spends 1/2 of its revenue on payroll, 1/4 on inventory, and 1/5 on healthcare. If the remaining \$200,000 of revenue is issued as dividends, what is the business's total revenue?

A. \$2 million
B. \$3 million
C. \$4 million
D. \$4.5 million
E. \$5 million

To get a better idea of what's going on, let's rewrite the 3 fractions (1/2, 1/4 and 1/5) with a common denominator (20).

We get: A certain business spends 10/20 of its revenue on payroll, 5/20 on inventory, and 4/20 on healthcare.
10/20 + 5/20 + 4/20 = 19/20
So, we have accounted for 19/20 of the revenue.
In other words, 1/20 of the revenue is not accounted for.

The remaining \$200,000 of revenue is issued as dividends
So, \$200,000 represents 1/20 of the revenue
We can write: \$200,000 = 1/20(revenue)
To solve for "revenue," we can multiply both sides by 20 to get: \$4,000,000 = revenue

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Re: A certain business spends 1/2 of its revenue on payroll, 1/4 on invent  [#permalink]

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27 Mar 2017, 13:33
1
1- (1/2 + 1/4 + 1/5)
1 - (10/20 + 5/20 + 4/20)
1/20

1/20x = 200,000
x = 4,000,000

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Re: A certain business spends 1/2 of its revenue on payroll, 1/4 on invent  [#permalink]

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28 Mar 2017, 20:52
1
Hi All,

This question can be solved by TESTing THE ANSWERS.

We're told that a business spends 1/2 of its revenue on payroll, 1/4 on inventory, 1/5 on healthcare and the REMAINING \$200,000 is issued as dividends. We're asked for the business's TOTAL revenue?

Let's TEST Answer B: \$3 million

1/2 of \$3 million = \$1.5 million
1/4 of \$3 million = \$0.75 million
1/5 of \$3 million = \$0.6 million
Total = \$2.85 million, which leaves \$150,000 for dividends. This is TOO LOW; there needs to be MORE revenue. Notice how \$200,000 is exactly 1/3 greater than \$150,000.... maybe we're looking for a total that is exactly 1/3 greater than \$3 million.....

Let's TEST Answer C: \$4 million

1/2 of \$4 million = \$2 million
1/4 of \$4 million = \$1 million
1/5 of \$4 million = \$0.8 million
Total = \$3.8 million, which leaves \$200,000 for dividends. This is an exact match for what we were told, so this MUST be the answer.

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Re: A certain business spends 1/2 of its revenue on payroll, 1/4 on invent  [#permalink]

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29 Mar 2017, 00:22
Converting into percentages, 1/2 is 50%, 1/4 is 25% and 1/5 is 20%
Adding the above, we get 95%. Also, it is given the remaining 5% is 200000\$

Hence total is 100% = 200000*20 = \$4 million(Option C)
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Re: A certain business spends 1/2 of its revenue on payroll, 1/4 on invent  [#permalink]

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20 Apr 2017, 07:38
1
Why is the OA E ? I think the answer should be C...
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Re: A certain business spends 1/2 of its revenue on payroll, 1/4 on invent  [#permalink]

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20 Apr 2017, 07:50
ppcm wrote:
Why is the OA E ? I think the answer should be C...

Yes, it's C. Edited the OA. Thank you.
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Re: A certain business spends 1/2 of its revenue on payroll, 1/4 on invent  [#permalink]

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16 Jul 2017, 18:24
the quickest way is to put everything in fractions, or even decimals..
0.5 - payroll
0.25 - inventory
0.2 - healthcare
total: 0.95

remaining, 0.05 of revenue is 200,000.
now... 0.1 would be 400,000
1 would be 4,000,000

no need of any complex operations...
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Re: A certain business spends 1/2 of its revenue on payroll, 1/4 on invent  [#permalink]

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20 Jul 2017, 16:34
Bunuel wrote:
A certain business spends 1/2 of its revenue on payroll, 1/4 on inventory, and 1/5 on healthcare. If the remaining \$200,000 of revenue is issued as dividends, what is the business's total revenue?

A. \$2 million
B. \$3 million
C. \$4 million
D. \$4.5 million
E. \$5 million

We can let t = total revenue, and we can create the following equation:

(1/2)t + (1/4)t + (1/5)t + 200,000 = t

Multiplying the entire equation by 20, we have:

10t + 5t + 4t + 4,000,000 = 20t

4,000,000 = t

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Re: A certain business spends 1/2 of its revenue on payroll, 1/4 on invent   [#permalink] 20 Jul 2017, 16:34
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