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
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