pushpitkc wrote:

A retailer adds freely available water to an orange concentrate, costing $50 per liter, to prepare an orange drink. He sells the drink at $30 per liter and earns 50% profit on his investment. How many liters of water does he add to each liter of the orange concentrate?

A. 0.5

B. 0.60

C. 0.67

D. 1

E. 1.5

Source:

Experts GlobalFind cost from revenue, then volume from cost.

• Find cost from revenue

Suppose he sells 10 liters for $30 per liter.

(10 * $30) = $300 Total revenue

That revenue earns him 50% profit on his investment

Revenue = 150% Cost = 1.5(Cost)

1.5(Cost) = $300

Cost =

\(\frac{$300}{1.5}\)=$200

• Liters of OJ used in mix sold?

Cost = $200

Cost per liter of OJ = $50

Cost per liter of water = $0

\(\frac{TotalCost}{CostPerLiter} =\) # of liters of OJ

For 10L of mix he used

\(\frac{$200}{$50}=4\) liters of OJ concentrate

• Liters of water used in mix?

(10L mix - 4L OJ) = 6L of water used

• Liters of water added to liter of OJ to make mix?

Volume ratio is

\(\frac{Water}{OJ}=\frac{6}{4}=\frac{3}{2}=\frac{1.5}{1}=1.5\) L of water per L of OJ

Answer EAlternatively,

ONE liter sold.

Revenue = 1.5C

$30 = 1.5C

Cost:

\(\frac{$30}{1.5} = $20\)Volume of $20 worth of OJ at

\(\frac{$50}{L}\)\(\frac{$20}{$50}=\frac{2}{5}\) L of OJ

1 L mix sold.

\(\frac{2}{5}\) L is OJ

1L -

\(\frac{2}{5}\) L =

\(\frac{3}{5}\) L of water

\(\frac{Water}{OJ}=\frac{\frac{3}{5}}{\frac{2}{5}}=\frac{3}{2}=1.5\) liters of water added per L of OJ

Answer E
_________________

In the depths of winter, I finally learned

that within me there lay an invincible summer.

-- Albert Camus, "Return to Tipasa"