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Difficulty:   65% (hard)

Question Stats: 55% (02:27) correct 45% (02:59) wrong based on 108 sessions

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A newly-opened retail store made $400 profit on the initial expenditure of$25000, and then made $1200 profit on the next$80000 expenditure. By approximately what percent did the ratio of profit to expenditure change from the first $25000 expenditure to the next$80000 expenditure?

A. 6.67% decrease
B. 6.25% decrease
C. 0
D. 6.25% increase
E. 6.67% increase

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Manager  G
Joined: 19 Nov 2017
Posts: 181
Location: India
Schools: ISB
GMAT 1: 670 Q49 V32 GPA: 4

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1
EgmatQuantExpert wrote:
A newly-opened retail store made $400 profit on the initial expenditure of$25000, and then made $1200 profit on the next$80000 expenditure. By approximately what percent did the ratio of profit to expenditure change from the first $25000 expenditure to the next$80000 expenditure?

A. 6.67% decrease
B. 6.25% decrease
C. 0
D. 6.25% increase
E. 6.67% increase

Another way
let's see the profit on say 5000$400 on 25000 so $$\frac{400}{5}=80$$ in 5000 1200 on 80000 so $$\frac{1200}{(8*2)}=75$$ in 5000 so profit decreased from 80 to 75, so change = $$\frac{(80-75)}{80}*100=\frac{500}{80}$$=6.25% B _________________ Manager  B Joined: 28 Jun 2018 Posts: 74 Re: A newly-opened retail store made$400 profit on the initial exp  [#permalink]

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Hi vaibhav1221 ...can you explain what exactly you've done?

Why haven't we just taken the differences of 2/125 and 200/3 and divided that by 2/125? Isn't that how you see percent change? Manager  G
Joined: 19 Nov 2017
Posts: 181
Location: India
Schools: ISB
GMAT 1: 670 Q49 V32 GPA: 4

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3

Solution

Given:
• A newly-opened retail store made $400 profit on the initial expenditure of$25000, and then made $1200 profit on the next$80000 expenditure

To find:
• By approximately what percent did the ratio of profit to expenditure change from the first $25000 expenditure to the next$80000 expenditure

Approach and Working:
When the expenditure is $25000, the profit is$400

Maintaining the same ratio, we can say,
• When the expenditure is $80000, the profit should be $$\frac{400}{25000} * 80000$$ =$1280

However, on $80000 expenditure, the store is making a profit of$1200 only
• Therefore, the percentage decrease in profit = $$\frac{1280 – 1200}{1280} * 100$$ = 6.25%

Hence, the correct answer is option B.

Answer: B
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EMPOWERgmat Instructor V
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GMAT 1: 800 Q51 V49 GRE 1: Q170 V170 Re: A newly-opened retail store made $400 profit on the initial exp [#permalink] ### Show Tags Hi All, We're told that a newly-opened retail store made$400 profit on the initial expenditure of $25000, and then made$1200 profit on the next $80000 expenditure. We're asked for the approximate percentage change in the ratio of profit to expenditure change from the first$25000 expenditure to the next $80000 expenditure. This question requires the use of the Percentage Change Formula - and you will likely find it helpful to rewrite the given values as individual percentages (instead of fractions). Percentage Change = (New - Old)/(Old) = Difference/Original The ratio of the original profit-to-expenditure = 400/25000 = 4/250 The ratio of the second profit-to-expenditure = 1200/80000 = 12/800 We can rewrite those fractions as percents... 4/250 = 16/1000 = 1.6% 12/800 = 1.5/100 = 1.5% Thus, there was clearly a decrease (from 1.6% to 1.5%). Using the Percentage Change Formula, we have... (1.6 - 1.5)/(1.6) = 0.1/1.6 = 1/16 = a 6 1/4% decrease. Final Answer: GMAT assassins aren't born, they're made, Rich _________________ 760+: Learn What GMAT Assassins Do to Score at the Highest Levels Contact Rich at: Rich.C@empowergmat.com *****Select EMPOWERgmat Courses now include ALL 6 Official GMAC CATs!***** # Rich Cohen Co-Founder & GMAT Assassin Follow Special Offer: Save$75 + GMAT Club Tests Free
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www.empowergmat.com/ Re: A newly-opened retail store made $400 profit on the initial exp [#permalink] 11 Apr 2019, 11:14 Display posts from previous: Sort by # A newly-opened retail store made$400 profit on the initial exp

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