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At the beginning of last year, Tony's Auto Dealership had [#permalink]

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16 Dec 2010, 10:48

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E

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At the beginning of last year, Tony's Auto Dealership had 200 cars available for sale on the lot. The cars were acquired by Tony's at an average cost of $10,000 each. During last year, Tony's acquired an additional 50 cars. What was the total acquisition cost of the cars that were on the lot at Tony's at the end of last year?

(1) The average cost per car of all cars acquired by Tony's last year was $12,500. (2) Tony's total revenue from cars sold last year was $1,050,000.

I got A here. The official answer is E, Do you agree?

Quote:

The correct answer to this question is (E).

In evaluating statement (1) alone, we are able to calculate the total cost of cars that Tony’s acquired last year, but we do not know how many and which cars Tony’s sold last year, so we don’t know how many or which cars remain on the lot at the end of the year: as such, statement (1) alone is not sufficient.

In evaluating statement (2) alone, we know Tony's total revenue from last year. But we do not know which cars Tony's sold and, accordingly, the acquisition cost of such cars, and we do not know the cost of the cars which Tony's acquired last year. As such, statement (2) alone is not sufficient.

When evaluating statements (1) and (2) together, we know Tony’s total revenue last year and can calculate the total cost of the cars Tony's acquired last year. But we still do not know which cars Tony's sold last year and, accordingly, cannot calculate the acquisition cost of such cars. Therefore, we are unable to determine the acquisition cost of the cars remaining on the lot to be sold at the end of the year. Statements (1) and (2) together are not sufficient to answer the question, and the correct response is E.

At the beginning of last year, Tony's Auto Dealership had 200 cars available for sale on the lot. The cars were acquired by Tony's at an average cost of $10,000 each. During last year, Tony's acquired an additional 50 cars. What was the total acquisition cost of the cars that were on the lot at Tony's at the end of last year?

(1) The average cost per car of all cars acquired by Tony's last year was $12,500. (2) Tony's total revenue from cars sold last year was $1,050,000.

Yes E is correct. Since we don't know how many and which cars were sold during the year we can not determine total cost of cars on the lot at the end of the year (we can only get the total cost of 250 cars, but we don't know how many of them are still left at the end of the year on the lot, info about the revenue is absolutely useless we don't know how many or which cars generated this revenue).

My problem with the question is that there is nothing to suggest that a cars have been sold in first year. When I saw option B after A, I thought he is trying to trick me by mentioning sold cars. I somehow am inclined to believe that this is a poorly worded question.

My problem with the question is that there is nothing to suggest that a cars have been sold in first year. When I saw option B after A, I thought he is trying to trick me by mentioning sold cars. I somehow am inclined to believe that this is a poorly worded question.

Apologies for wrong posting!

Even if we were not told in statement (2) that there actually was one or more cars sold, still our assumption that there wasn't any sale would have been wrong: you shouldn't assume anything while solving a question.

Moreover, since we are told in (2) that there was a sale made during the year then you should take this statement as true: on the GMAT, two data sufficiency statements always provide TRUE information and these statements never contradict each other. So you won't see a question on GMAT were statement (1) is sufficient alone and statement (2) contradicts it just to confuse you and make you think that it's not sufficient.

The wording is awkward, and it's more a Reading Comprehension question than a math question. I suppose once in a while you see similar questions on the GMAT, but they're rare. Here we know the dealership acquired 50 cars, so we know from Statement 1 the acquisition cost of the 250 cars that were on the lot at some point during the year. The issue is, some of the cars were sold during the year, as we know from Statement 2. So we did not have 250 cars left on the lot at the end of the year. Statement 2 tells us about the revenue from the sold cars, but that gives us information only about the sale price of the cars, not about the acquisition price. Perhaps they sold one car only during the year, but they sold it for over a million dollars, or perhaps they sold every car on the lot and made $1,050,000 (or whatever the total is, there's a typo in the original post) from the sales. The answer is E.
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Re: At the beginning of last year, Tony's auto dealership had 200 cars ava [#permalink]

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11 Jun 2011, 07:16

IanStewart - why do we have to consider that cars have been sold if we only consider A. The average cost per car of all cars acquired by Tony's last year was $12,500

Please explain
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Re: At the beginning of last year, Tony's auto dealership had 200 cars ava [#permalink]

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11 Jun 2011, 08:20

puneetj wrote:

IanStewart - why do we have to consider that cars have been sold if we only consider A. The average cost per car of all cars acquired by Tony's last year was $12,500

Please explain

st - At the begining of last year, Tony's auto dealership had 200 cars available for sale on the lot.

As per this statement - 1) we have data at the begining of the year. 2) the cars are available for sale

What was the total acquisition cost of the cars that were on the lot at Tony's at the end of year? As per this statement - 1) asking for data at the end of the year.

Based on these 2 statements - it is possible that # of cars at the end of the year < cars at the end of the year.

ok... this was a toughie and i had to crack my head too

the question asks this.... i had 10 cars each worth $ 1000 -- > my cars value (in this case acquisition cost ) is 10 * 1000 = 10,000

what would be my net asset value at the end of the year...

so if i sold 2 cars.. my acquisition cost is 8 * 1000 = 8000

considering this example, 1. the average cost of the cars is 12,500 but we dont know the total number of cars available in the garage... if it is 6, the total becomes 6*12,500 if the count is 10, the total becomes 10 * 12,500

so cannot find the total cost...

2. says total revenue is 1,050,000 ... here again we dont know if the 1,050,000 was obtained after selling 1 car or 2 or 10... so we dont know the count of the remaining cars....

together again we cant determine the count of the remaining cars... so ans is E

I would go with A. Going by the information available in the question only, I am assuming that no cars were sold and by the end of year there were 250 cars acquired at the average cost of 12,500. So the total acquisition cost would be 12,500*250.
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I would go with A. Going by the information available in the question only, I am assuming that no cars were sold and by the end of year there were 250 cars acquired at the average cost of 12,500. So the total acquisition cost would be 12,500*250.

That's the point. You cannot ASSUME that no cars were sold. The question very clearly asks "the acquisition cost of the cars that were on the lot at the end of last year" We do not know how many cars were on the lot at the end of last year. All we know is how many were there at the beginning and how many were purchased during the year. We do not know the average acquisition cost of the cars that are still on the lot at the end of last year because we do not know how many were sold and which ones were sold. The average acquisition cost would also change according to which cars are sold and which are still on the lot. So there is no way you can find out the total acquisition cost of the cars still on the lot. That is how Data Sufficiency challenges us. And let me add here: the wording is very clear. The number of cars on the lot at the end of last year is unknown and the question asks you exactly about that. You need to be able to infer that data is not sufficient. And did I say this before: That's how Data Sufficiency challenges us.
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At the beginning of last year, Tony's Auto Dealership had 200 cars available for sale on the lot. The cars were acquired by Tony's at an average cost of $10,000 each. During last year, Tony's acquired an additional 50 cars. What was the total acquisition cost of the cars that were on the lot at Tony's at the end of last year?

(1) The average cost per car of all cars acquired by Tony's last year was $12,500. (2) Tony's total revenue from cars sold last year was $1,050,000.

Yes E is correct. Since we don't know how many and which cars were sold during the year we can not determine total cost of cars on the lot at the end of the year (we can only get the total cost of 250 cars, but we don't know how many of them are still left at the end of the year on the lot, info about the revenue is absolutely useless we don't know how many or which cars generated this revenue).

I strongly believe the answer should be A. If we can't assume that no cars have been sold, how can you assume that some cars have been sold? Nothing is given here, so it is safe to assume that no cars have been sold. At best, a very poorly worded question IMO. I doubt whether real GMAT will have such questions.

No posting of PS/DS questions is allowed in the main Math forum.

The correct answer is E. It's the other way around, we don't know whether any car was sold, hence cannot assume that no cars was sold. Also, the second statement confirms that there was actually a sale.

Re: At the beginning of last year, Tony's Auto Dealership had [#permalink]

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