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A small business invests $9,900 in equipment to produce a

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A small business invests $9,900 in equipment to produce a  [#permalink]

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New post Updated on: 21 Jul 2015, 01:20
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Question Stats:

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A small business invests $9,900 in equipment to produce a product. Each unit of the product costs $0.65 to produce and is sold for $1.20. How many units of the product must be sold before the revenue received equals the total expense of production, including the initial investment in equipment?

A. 12,000
B. 14,500
C. 15,230
D. 18,000
E. 20,000

Originally posted by petercao on 08 Nov 2008, 20:16.
Last edited by Bunuel on 21 Jul 2015, 01:20, edited 1 time in total.
Renamed the topic, edited the question, added the OA and moved to PS forum.
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Re: A small business invests $9,900 in equipment to produce a  [#permalink]

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New post 08 Nov 2008, 20:34
1
petercao wrote:
A small business invests $9,900 in equipment to produce a product. Each unit of the product costs $0.65 to produce and is sold for $1.20. How many units of the product must be sold before the revenue received equals the total expense of production, including the initial investment in equipment?

A. 12,000
B. 14,500
C. 15,230
D. 18,000
E. 20,000


the total expense of production is 9,900+0.65x
and the revenue is 1.20x

so x=18,000
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Re: A small business invests $9,900 in equipment to produce a  [#permalink]

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New post 08 Nov 2008, 20:35
x is the number of units

Total product cost = total expense = 0.65x
Total product sale prices: 1.2x

Revenue receive = 1.2x - 9,900

1.2x - 9,900 = 0.65 <=> x = 18,000 (D)
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Re: A small business invests $9,900 in equipment to produce a  [#permalink]

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New post 20 Jul 2015, 12:32
2
1
A small business invests $9,900 in equipment to produce a product. Each unit of the product costs $0.65 to produce and is sold for $1.20. How many units of the product must be sold before the revenue received equals the total expense of production, including the initial investment in equipment?

A. 12,000
B. 14,500
C. 15,230
D. 18,000
E. 20,000



If we ask the question a different way, that answer is much easier to see. The company makes $0.55 ($1.20 less the $0.65) on each product. so how many of these products will need to be made to cover the initial $9,900 equipment cost. 9,900/0.55 will give us the answer. 9,900/0.55 is 18,000 ==> the correct answer is D.
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Re: A small business invests $9,900 in equipment to produce a  [#permalink]

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New post 07 Aug 2018, 06:24
Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

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Re: A small business invests $9,900 in equipment to produce a &nbs [#permalink] 07 Aug 2018, 06:24
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