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# A company's two division performed with remarkable consistency over th

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A company's two division performed with remarkable consistency over th [#permalink]

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15 Feb 2007, 21:19
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A company's two division performed with remarkable consistency over the past three years: in each of those years, the pharmaceuticals division has accounted for roughly 20 percent of dollars sales and 40 percent of profits, and the chemicals division for the balance.

Regarding the past three years, which of the following can properly be inferred from the statement above?

(A) Total dollars sales for each of the company's divisions have remained roughly constant.

(B) The pharmaceuticals division has faced stiffer competition in its markets than has the chemicals division.

(C) The chemical division has realized lower profits per dollars of sales than has the pharmaceuticals division.

(D) The product mix offered by each of the company's divisions has remained unchanged.

(E) Highly profitable products accounted for a higher percentage of the chemicals division's sales than of the pharmaceuticals division's.
[Reveal] Spoiler: OA

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Re: A company's two division performed with remarkable consistency over th [#permalink]

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15 Feb 2007, 21:33
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faifai0714 wrote:
A company's two division performed with remarkable consistency over the past three years: in each of those years, the pharmaceuticals division has accounted for roughly 20 percent of dollars sales and 40 percent of profits, and the chemicals division for the balance.

Regarding the past three years, which of the following can properly be inferred from the statement above?

A) Total dollars sales for each of the company's divisions have remianed roughly constant.

B) The pharmaceuticals division has faced stiffer competition in its markets than has the chemicals division.

C)The chemical division has realized lower profits per dollars of sales than has the pharmaceuticals division.

D)The product mix offered by each of the company's divisions has remained unchanged.

E) Highly profitable products accounted for a higher percentage of the chemicals division's sales than of the pharmaceuticals division's.

It is very helpful to pick numbers for such questions.

Assume Total sales=500 and Total profits=100

Sales of pharmaceutical division=0.20*500=100
Profits from pharmaceutical division=40
Profits per dollar of sale=40/100=0.4

Sales of chemical division=0.80*500=400
Profits from chemical division=60
Profits per dollar of sale=60/400=0.15

0.15<0.40

From this, we can conclude that C is true.

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Re: A company's two division performed with remarkable consistency over th [#permalink]

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16 Feb 2007, 10:26
C..

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Re: A company's two division performed with remarkable consistency over th [#permalink]

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16 Feb 2007, 20:29
yep..one more C.

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Re: A company's two division performed with remarkable consistency over th [#permalink]

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17 Feb 2007, 11:18
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It's 'C'

For ex. let's assume total sale is 100 and total profit is 30%, which is 30.

Pharma.: Total sale 20%, which is 20 , profit is 12 (40% of 30). Profit margin is: 100*12/20 = 60%

Chem.: Total sale 80%, which is 80, profit is 18 (60% of 30). Profit margin is: 100*18/80 = 22.5%

Therefore, Chem dept. has lower profit margin than Pharma.

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Re: A company's two division performed with remarkable consistency over th [#permalink]

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17 Feb 2007, 19:02
C !
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Re: A company's two division performed with remarkable consistency over th [#permalink]

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17 Feb 2007, 19:07
C

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Re: A company's two division performed with remarkable consistency over th [#permalink]

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19 Feb 2007, 00:39
OA is C

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Re: A company's two division performed with remarkable consistency over th [#permalink]

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27 Sep 2010, 20:04
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A company’s two divisions performed with remarkable consistency over the past three years: in each of those years, the pharmaceuticals division has accounted for roughly 20 percent of dollar ales and 40 percent of profits, and the chemicals division for the balance.

Which of the following can properly be inferred regarding the past three years from the statement above?

a) Total dollar sales for each of the company’s divisions have remained roughly constant.
b) The pharmaceuticals division has faced stiffer competition in its markets than has the chemicals division.
c) The chemicals division has realized lower profits per dollar of sales than has the pharmaceuticals division.
d) The product mix offered by each of the company’s divisions has remained unchanged.
e) Highly profitable products accounted for a higher percentage of the chemicals division’s sales than of those of the pharmaceuticals divisions.

Think before you go for the answer

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Re: A company's two division performed with remarkable consistency over th [#permalink]

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27 Sep 2010, 21:33
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a) Total dollar sales for each of the company’s divisions have remained roughly constant.
We do not know the the total dollar sales for the divisions. Wrong answer.

b) The pharmaceuticals division has faced stiffer competition in its markets than has the chemicals division.
The statement says nothing about competition in the markets.

d) The product mix offered by each of the company’s divisions has remained unchanged.
It doesn't matter if the product mix offered by each of the company’s divisions remained the same or not.

c) The chemicals division has realized lower profits per dollar of sales than has the pharmaceuticals division.
The pharmaceuticals division has accounted for 20% of the total dollar sales and 40% of the profits while the chemicals division has accounted for 80% of the total dollar sales and 60% of the profits. So we can infer that the pharma division made more profits per dollar of sales than the chemicals division did.

e) Highly profitable products accounted for a higher percentage of the chemicals division’s sales than of those of the pharmaceuticals divisions.
If the chemicals division's products were highly profitable compared to those of the pharma division, then the chemicals division should have made much more profits on the total dollar sales than the pharma division. However, this was not the case.

I go for C.
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Re: A company's two division performed with remarkable consistency over th [#permalink]

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27 Sep 2010, 23:52
suyashjhawar wrote:
A company’s two divisions performed with remarkable consistency over the past three years: in each of those years, the pharmaceuticals division has accounted for roughly 20 percent of dollar ales and 40 percent of profits, and the chemicals division for the balance.

Which of the following can properly be inferred regarding the past three years from the statement above?

a) Total dollar sales for each of the company’s divisions have remained roughly constant.
b) The pharmaceuticals division has faced stiffer competition in its markets than has the chemicals division.
c) The chemicals division has realized lower profits per dollar of sales than has the pharmaceuticals division.
d) The product mix offered by each of the company’s divisions has remained unchanged.
e) Highly profitable products accounted for a higher percentage of the chemicals division’s sales than of those of the pharmaceuticals divisions.

Think before you go for the answer

I think it should be A because the the entire percentages are based on total dollar sales value, if they remain constant

A is the one I go for. It is the sole assumption on which the statements are based. For a period of three years and key word "each of those years"

rest all go out of the way.

D was an option here but somehow it looked vague to me here. A is the only option which atleast qualifies.

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Re: A company's two division performed with remarkable consistency over th [#permalink]

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28 Sep 2010, 06:57
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C

A is not the right choice. The question is talking about 20% and 80% total sales between the two divisions.
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Re: A company's two division performed with remarkable consistency over th [#permalink]

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28 Sep 2010, 08:13
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suyashjhawar wrote:
A company’s two divisions performed with remarkable consistency over the past three years: in each of those years, the pharmaceuticals division has accounted for roughly 20 percent of dollar ales and 40 percent of profits, and the chemicals division for the balance.

Which of the following can properly be inferred regarding the past three years from the statement above?

a) Total dollar sales for each of the company’s divisions have remained roughly constant.
b) The pharmaceuticals division has faced stiffer competition in its markets than has the chemicals division.
c) The chemicals division has realized lower profits per dollar of sales than has the pharmaceuticals division.
d) The product mix offered by each of the company’s divisions has remained unchanged.
e) Highly profitable products accounted for a higher percentage of the chemicals division’s sales than of those of the pharmaceuticals divisions.

Think before you go for the answer

If "S" is sales and "P" is profit:
$$Pharma = 0.4*P/0.2*S = 2P/S$$
$$Chemic = 0.6*P/0.8*S = 3P/4S$$

Thus, the chemical division realizes a lower profit per sales than that of the Pharma. C.

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Re: A company's two division performed with remarkable consistency over th [#permalink]

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28 Sep 2010, 08:23
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This seems like such a math question. I read through all of the answer choices and read E. I thought E was the right answer but it seemed to easy then looked back at C. C is the answer for sure. Pharma: 20% of "ales" but makes up 40% of profits.
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Re: A company's two division performed with remarkable consistency over th [#permalink]

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28 Sep 2010, 09:02
MBAUncle wrote:
suyashjhawar wrote:
A company’s two divisions performed with remarkable consistency over the past three years: in each of those years, the pharmaceuticals division has accounted for roughly 20 percent of dollar ales and 40 percent of profits, and the chemicals division for the balance.

Which of the following can properly be inferred regarding the past three years from the statement above?

a) Total dollar sales for each of the company’s divisions have remained roughly constant.
b) The pharmaceuticals division has faced stiffer competition in its markets than has the chemicals division.
c) The chemicals division has realized lower profits per dollar of sales than has the pharmaceuticals division.
d) The product mix offered by each of the company’s divisions has remained unchanged.
e) Highly profitable products accounted for a higher percentage of the chemicals division’s sales than of those of the pharmaceuticals divisions.

Think before you go for the answer

If "S" is sales and "P" is profit:
$$Pharma = 0.4*P/0.2*S = 2P/S$$
$$Chemic = 0.6*P/0.8*S = 3P/4S$$

Thus, the chemical division realizes a lower profit per sales than that of the Pharma. C.

Guys you cannot make those calculations unless the total sales value is constant. We dont know the changes which happened in share out of the total value across all years.

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Re: A company's two division performed with remarkable consistency over th [#permalink]

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28 Sep 2010, 09:39
sauravdas wrote:
Guys you cannot make those calculations unless the total sales value is constant. We dont know the changes which happened in share out of the total value across all years.

A company’s two divisions performed with remarkable consistency over the past three years.
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Re: A company's two division performed with remarkable consistency over th [#permalink]

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28 Sep 2010, 10:17
OA is C friends.Rightly pointed by many.

Pharmaceuticals division made 40% profit on only 20 % of sales while chemicals division making up the balance made 60% of profits on 80% of sales. Thus chemicals division made a lower profit per dollar of sale than the pharmaceuticals division, hence Choice C.
No info about total dollar sales, so A incorrect nor about the severity of competition so B incorrect. No info is provided about the mix of products nor about the breakdown between highly profitable and not highly profitable products. So neither D nor E.

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Re: A company's two division performed with remarkable consistency over th [#permalink]

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28 Sep 2010, 10:29
suyashjhawar wrote:
OA is C friends.Rightly pointed by many.

Pharmaceuticals division made 40% profit on only 20 % of sales while chemicals division making up the balance made 60% of profits on 80% of sales. Thus chemicals division made a lower profit per dollar of sale than the pharmaceuticals division, hence Choice C.
No info about total dollar sales, so A incorrect nor about the severity of competition so B incorrect. No info is provided about the mix of products nor about the breakdown between highly profitable and not highly profitable products. So neither D nor E.

Thanks for posting the questions, these are great. Keep up the good work.
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Re: A company's two division performed with remarkable consistency over th [#permalink]

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28 Sep 2010, 11:09
OE?

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Re: A company's two division performed with remarkable consistency over th [#permalink]

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28 Sep 2010, 11:42
Dawgie wrote:
suyashjhawar wrote:
OA is C friends.Rightly pointed by many.

Pharmaceuticals division made 40% profit on only 20 % of sales while chemicals division making up the balance made 60% of profits on 80% of sales. Thus chemicals division made a lower profit per dollar of sale than the pharmaceuticals division, hence Choice C.
No info about total dollar sales, so A incorrect nor about the severity of competition so B incorrect. No info is provided about the mix of products nor about the breakdown between highly profitable and not highly profitable products. So neither D nor E.

Thanks for posting the questions, these are great. Keep up the good work.

Even i loved this question.Kudos waiting

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Re: A company's two division performed with remarkable consistency over th   [#permalink] 28 Sep 2010, 11:42

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