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10 Jun 2005, 19:24
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I wonder if these concepts will be tested on GMAT
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Hi there,
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10 Jun 2005, 21:32
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i think ther is nothing wrong with type of question. the basic concept is from finance.
The answer should be D.
MPS= p
EPS=e
% increase in mps = k
% increase in eps = m
MPS, after the increase= p(1+k)
EPS, after the increase = e(1+m)
ratio of mps to eps, before the increase = p/e
ratio of mps to eps, after the increase = p(1+k)/e(1+m)
% change in ration of mps to eps = (ratio before - ratio after)/ratio, before
= [p(1+k)/e(1+m) - p/e] = [(k-m)/(1+m)]x 100=100 (k-m)/(100+m)
The answer should be D.
MPS= p
EPS=e
% increase in mps = k
% increase in eps = m
MPS, after the increase= p(1+k)
EPS, after the increase = e(1+m)
ratio of mps to eps, before the increase = p/e
ratio of mps to eps, after the increase = p(1+k)/e(1+m)
% change in ration of mps to eps = (ratio before - ratio after)/ratio, before
= [p(1+k)/e(1+m) - p/e] = [(k-m)/(1+m)]x 100=100 (k-m)/(100+m)
