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Make a few assumptions and Choose Smart Numbers to make the calculation easier:

Let $Cost price per gallon (CP) = $100

Let the ORIGINAL Quantity of gallons purchased (Q) = 10



If the vendor sells these 10 gallons at CP, he will make 0-Zero Profit

Instead, the vendor sells at CP and is still able to gain a 20% Profit ------ Profit Percentage% is calculated in terms of CP


In order for the Profit Percentage% = +20% ------> the Vendor's Revenue (R) must be:

R = (120%) * (CP) ----- (equation 1)


Revenue is Calculated as:
R = ($Sales price per unit) * (Q of units sold) ------ (equation 2)



equation 1 = equation 2
(120%) * (CP) = ($Sales price) * (Q)


we are told that: $Sales Price = CP

(120%) * (CP) = (CP) * (Q)


In order to Satisfy the fact that Profit Percentage% = +20% -------> the Q-Sold must INCREASE by +20%



the vendor INCREASES the Q-Sold by diluting the Milk with Water:


Original Q = 10 gallons Milk

%Increase in Q by 20%
_______________________

NEW Quantity must = 12 gallons


Originally Had 10 gallons of Milk ------> Therefore must add +2 gallons of Water to get to a TOTAL Q-Sold of 12 Gallons


Milk : Water : TOTAL = 10 : 2 : 12 = 5 : 1 : 6



the Ratio of MILK : WATER = 5 : 1


-B-
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Bunuel
A milk vendor sells milk at Cost Price but still gains 20%. Find the ratio of milk and water in every gallon that he sells.

A. 4:1
B. 5:1
C. 5:2
D. 6:1
E. None of these


Are You Up For the Challenge: 700 Level Questions
Here's a very simple approach. -> 10 milk to be sold at the price of 12 milk. So Water = 2. So the ratio of milk:water is 10:2 = 5:1
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