If the list price of a new car was $12,300, what was the cost of the

If the list price of a new car was $12,300, what was the cost of the car to the dealer?

(1) The cost to the dealer was equal to 80 percent of the list price.
\(12,300 * 0.80 = $9,840\)
SUFFICIENT

(2) The car was sold for $11,070, which was 12.5 percent more than the cost to the dealer.
\(11,070 / 1.125 = $9,840\)
SUFFICIENT


Answer: D

Given: The list price of a new car was $12,300

Let x = the cost of the car to the dealer

Target question: What is the value of x?

Statement 1: The cost to the dealer was equal to 80 percent of the list price.
Rewrite as: cost to the dealer = 80% of list price
Substitute to get: x = 80% of $12,300
Since we COULD evaluate 80% of $12,300, we COULD find the value of x, which means we could answer the target question with certainty (but we'd never waste our time doing so on that day!)
Statement 1 is SUFFICIENT

Statement 2: The car was sold for $11,070, which was 12.5 percent more than the cost to the dealer
We can write: $11,070 = 12.5% more than the cost to the dealer
In other words: $11,070 = 12.5% more than x
In other words: $11,070 = x + (12.5% of x)
In other words: $11,070 = x + (0.125x)
In other words: $11,070 = 1.125x
Solve: x = 11,070/1.125
Since we can answer the target question with certainty, statement 2 is SUFFICIENT

Answer: D

Cheers,
Brent

[quote="Bunuel"]If the list price of a new car was $12,300, what was the cost of the car to the dealer?

(1) The cost to the dealer was equal to 80 percent of the list price.
(2) The car was sold for $11,070, which was 12.5 percent more than the cost to the dealer.[/quote


How do we know that list price was same as selling price and no discount was given..

Posted from my mobile device

Sorry,my question was is it safe to assume list price and selling price are same when they are asking profit, and nothing is given about discount.

Hello Gurmukh,

Are you sure the question is asking us to find the profit? I think the question is about finding the cost of the car to the dealer i.e. the Cost price. Not the profit!

From the question data, we know the List price to be $12,300.

Statement I tells us that the cost price is 80% of the list price. This is sufficient to find the cost price. Possible answer options are A or D.

Statement II tells us that the selling price of the car was $11,070 which is 25% more than the cost price. This is sufficient to find out the cost price. Answer option A can be eliminated.

The correct answer option is D.

It seems like you solved a completely different question in your head. Maybe as you were skimming through the statements, you may have subconsciously combined the information given in the statements and you might have assumed that it’s the profit that has to be found out. Just surmising here!

Hope this answers your query!

Thanks.

BrentGMATPrepNow you mentioned that " In other words: $11,070 = 0.125x " shouldn't it be $11,070 = 1.125x

Good catch - thanks!
I've edited my response accordingly.
Kudos for you!!!!

Cheers,

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