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# A dealer sells goods at a profit of 10% . if cost of goods

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Director
Joined: 07 Jun 2004
Posts: 610

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Location: PA
A dealer sells goods at a profit of 10% . if cost of goods [#permalink]

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29 Jan 2005, 05:04
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A dealer sells goods at a profit of 10% . if cost of goods doubles and profit becomes 1/4th of present value, then the actual profit now is what percent of the previous profit.

Kudos [?]: 921 [0], given: 22

VP
Joined: 25 Nov 2004
Posts: 1482

Kudos [?]: 126 [0], given: 0

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29 Jan 2005, 06:54
not much clear..............................

profit, before = S0-C0= .1S0(10% of selling price)

profit, after = Sn-Cn=1/4 of present value(S0?) = .25 S0

profit, after/Profit, before = .25 S0/.1S0 = 250%???????

Kudos [?]: 126 [0], given: 0

Current Student
Joined: 28 Dec 2004
Posts: 3351

Kudos [?]: 319 [0], given: 2

Location: New York City
Schools: Wharton'11 HBS'12

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29 Jan 2005, 09:18
whenever you have such questions, pick a number!

so lets say orig. cost= \$100.

10% of 100= \$10 profit!

cost now doubles....to \$200

new profit 1/4 of \$200= \$50

previous proft was \$10. so new profit is \$50/\$10 *100= 500%

I see what MA did I think the catch here...I first did it the way he did, but then realized we are actually comparing actual profit values not %profit of the cost....

Kudos [?]: 319 [0], given: 2

SVP
Joined: 03 Jan 2005
Posts: 2231

Kudos [?]: 376 [0], given: 0

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29 Jan 2005, 13:22
What seems unclear to me about the question, is the phrase "1/4 of the present value". Question is present value of what? Present value of the cost? The selling price? The profit? The percentage of profit? I can't solve the question unless I know what it means.

Kudos [?]: 376 [0], given: 0

Director
Joined: 07 Jun 2004
Posts: 610

Kudos [?]: 921 [0], given: 22

Location: PA

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30 Jan 2005, 07:47
OA = 50%

here present value means the current value of the profit so 10% is profit so 1/4th the present value is 2.5%

Kudos [?]: 921 [0], given: 22

Current Student
Joined: 28 Dec 2004
Posts: 3351

Kudos [?]: 319 [0], given: 2

Location: New York City
Schools: Wharton'11 HBS'12

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30 Jan 2005, 09:29
RXS
could you divulge more details....these wordings in word problems always are very confusing for me....

Kudos [?]: 319 [0], given: 2

SVP
Joined: 03 Jan 2005
Posts: 2231

Kudos [?]: 376 [0], given: 0

Re: PS: P and L [#permalink]

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30 Jan 2005, 10:12
rxs0005 wrote:
A dealer sells goods at a profit of 10% . if cost of goods doubles and profit becomes 1/4th of present value, then the actual profit now is what percent of the previous profit.

Ok lets see if we can solve this now, with the explanation about the profit.

Profit=Price(P)-Cost(C)=10%*C
C1=2C
Profit1(percentage)=1/4*10%=2.5%
Profit1/Profit=2.5%C1/10%C=1/4*2=1/2=50%

This question is not good, as when you say profit is 1/4 of the present value (of profit), you should be talking about the \$ amount, instead of the percentage, since profit is defined as your sales minus your cost, and not a percentage in itself.

Kudos [?]: 376 [0], given: 0

Re: PS: P and L   [#permalink] 30 Jan 2005, 10:12
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