Events & Promotions
|
|
GMAT Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.
Customized
for You
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Apr 2711:00 AM EDT
-12:00 PM EDT
Prefer video-based learning? The Target Test Prep OnDemand course is a one-of-a-kind video masterclass featuring 400 hours of lecture-style teaching by Scott Woodbury-Stewart, founder of Target Test Prep and one of the most accomplished GMAT instructors
Apr 2808:00 AM PDT
-11:00 AM PDT
Whether you are just beginning your MBA journey or fine-tuning your path to a 700+ score, GMAT Day is designed to give you a competitive edge.
05 Sep 2024, 01:30
Kudos
Bookmarks
C
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
85%
(hard)
Question Stats:
49% (01:58) correct
51%
(01:44)
wrong
based on 259
sessions
History
Date
Time
Result
Not Attempted Yet
A social networking website reported x% higher profit this year compared to last year. Is x greater than 10? (They made a profit in both years)
(1) The website has reported an increase of 5% in expenses.
(2) The website reported an increase of 10% in revenue.
(1) The website has reported an increase of 5% in expenses.
(2) The website reported an increase of 10% in revenue.
08 Sep 2024, 10:04
Kudos
Bookmarks
Previous year: \(Revenues_1 - Expenses_1 = Profit_1\)
Current year: \(Revenues_2 - Expenses_2 = Profit_2 \)
Rewriting taking into account both statements 1) and 2):
Current year: \(1,1Revenues_1 - 1,05Expenses_1 = (1+x\%)*Profit_1\)
The yearly change in percentage is thus: \(x\%= \frac{1,1Revenues_1 - 1,05Expenses_1 - (Revenues_1 - Expenses_1)}{Revenues_1 - Expenses_1}*100\)
Which is equivalent to: \(x\% = \frac{0,1Revenues_1 - 0,05 Expenses_1}{Revenues_1 - Expenses_1}*100 \). It's useful to rewrite this as: \(x\% = \frac{0,1(Revenues_1 - Expenses_1) + 0,05Expenses_1}{Revenues_1 - Expenses_1}*100 \).
We can simplify further: \(x\% = 10+ \frac{0,05Expenses_1}{Revenues_1 - Expenses_1}*100\). Examining this last equation we can see how, given that Profit last year (or \(Revenues_1 - Expenses_1 > 0\)) and \(Expenses_1 \geq{0}\), \(x\%\geq{10}\).
Thus answer is E, both statements taken together are not sufficient. Where did I do wrong? I guess a possible explanation would be that if an increase in expenses is mentioned it would be naive to think they were 0?
Current year: \(Revenues_2 - Expenses_2 = Profit_2 \)
Rewriting taking into account both statements 1) and 2):
Current year: \(1,1Revenues_1 - 1,05Expenses_1 = (1+x\%)*Profit_1\)
The yearly change in percentage is thus: \(x\%= \frac{1,1Revenues_1 - 1,05Expenses_1 - (Revenues_1 - Expenses_1)}{Revenues_1 - Expenses_1}*100\)
Which is equivalent to: \(x\% = \frac{0,1Revenues_1 - 0,05 Expenses_1}{Revenues_1 - Expenses_1}*100 \). It's useful to rewrite this as: \(x\% = \frac{0,1(Revenues_1 - Expenses_1) + 0,05Expenses_1}{Revenues_1 - Expenses_1}*100 \).
We can simplify further: \(x\% = 10+ \frac{0,05Expenses_1}{Revenues_1 - Expenses_1}*100\). Examining this last equation we can see how, given that Profit last year (or \(Revenues_1 - Expenses_1 > 0\)) and \(Expenses_1 \geq{0}\), \(x\%\geq{10}\).
Thus answer is E, both statements taken together are not sufficient. Where did I do wrong? I guess a possible explanation would be that if an increase in expenses is mentioned it would be naive to think they were 0?
09 Sep 2024, 05:55
Kudos
Bookmarks
let's pose P2 = profit of the year and P1= profit of the year before
P1=R1-C1
P2=R2-C2
then P2=((100+x)/100)P1
statement 1 only : C2=(105/100)C1 not sufficient to solve the problem.
statement 2 only : R2=(110/100)R1 net sufficient either
both statements: P2=R2-C2=(110/100)R1-(105/100)C1=[1/100](110R1-105C1+5C1-5C1)=[1/100](110P1+5C1)
we already know P2=((100+x)/100)P1 so ((100+x)/100)P1=[1/100](110P1+5C1)
Rearrange : 100+x-110=110+(5C1/P1)
because 5C1/P1>0 we get : 100+x-110>0 ie x>10
P1=R1-C1
P2=R2-C2
then P2=((100+x)/100)P1
statement 1 only : C2=(105/100)C1 not sufficient to solve the problem.
statement 2 only : R2=(110/100)R1 net sufficient either
both statements: P2=R2-C2=(110/100)R1-(105/100)C1=[1/100](110R1-105C1+5C1-5C1)=[1/100](110P1+5C1)
we already know P2=((100+x)/100)P1 so ((100+x)/100)P1=[1/100](110P1+5C1)
Rearrange : 100+x-110=110+(5C1/P1)
because 5C1/P1>0 we get : 100+x-110>0 ie x>10
