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VP  Joined: 29 Apr 2003
Posts: 1299
In 1999, Company X's gross profit was what percent of its  [#permalink]

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2
11 00:00

Difficulty:   55% (hard)

Question Stats: 60% (01:35) correct 40% (01:17) wrong based on 336 sessions

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In 1999, Company X's gross profit was what percent of its revenue?

(1) In 1999 Company X's gross profit was 1/3 of its expenses
(2) In 1999 Company X's expenses were 3/4 of its revenue.
Manager  Joined: 09 Feb 2006
Posts: 107
Location: New York, NY
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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4
In 1999, Company X's gross profit was what percent of its revenue?
1. In 1999 Company X's gross profit was 1/3 of its expenses
2. In 1999 Company X's expenses were 3/4 of its revenue.

Let's remember that gross profit equals revenue - expenses.

Statement 1: GP = 1/3 E
GP = R - E
GP = R - 3GP
R = 4GP

Therefore, Gross profit is 1/4 of revenues.

Statement 2: E = 3/4R
GP = R - E
GP = R - 3/4R
GP = 1/4R

Sufficient.

Intern  Joined: 07 Mar 2005
Posts: 24
Location: USA
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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But jcgoodchild, can we just assume that gross profit = revenue - expenses?

Realistically, what if the company had say an amortization charge? If GMAC wants us to use this formula, won't they actually display it next to the question? Because accordingly the answer would be D or C.
Manager  Joined: 09 Feb 2006
Posts: 107
Location: New York, NY
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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Well, I would be surprised if they didn't tell you in question how to get gross profit. However, even in real life, amortization charges are not applied to gross profit, they are applied to net profit. Gross profit is simply revenue minus all costs related to generating that revenue.
VP  Joined: 29 Dec 2005
Posts: 1092
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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In 1999 Company X's gross profit was what percent of its revenue?

(1) In 1999 Company Xâ€™s gross profit was 1/3 of its expenses.
(2) In 1999 Company Xâ€™s expenses were 3/4 of its revenue.
Manager  Joined: 13 Dec 2005
Posts: 191
Location: Milwaukee,WI
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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I would say D

P-Profit
R- Revenue
E- Expense

R =P + E

from first P =1/3* E so R = 4/3 *E from this we can find the percentage

from second E = 3/4 * R so P =1/4 * R From this we can find the percentage

so D
Manager  Joined: 11 Oct 2005
Posts: 79
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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I am getting C on this one

let profit = P
revenue = R
Expenses = E

so from question stem, P = what % of R
--> P = x%of R

From 1.

P= E/3 => not sufficient

From II

E = 3R/4 => not sufficient

Together

P = R/4

which means R/4 = x/100 * R

x = 25

so sufficient C
Director  Joined: 21 Sep 2003
Posts: 913
Location: USA
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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ipc302 wrote:
I would say D

P-Profit
R- Revenue
E- Expense

R =P + E

from first P =1/3* E so R = 4/3 *E from this we can find the percentage

from second E = 3/4 * R so P =1/4 * R From this we can find the percentage

so D

Got the same. Agree! with ipc's solution
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Manager  Joined: 11 Oct 2005
Posts: 79
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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I see the error in my calc....nice job
VP  Joined: 30 Mar 2006
Posts: 1433
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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D,

1) P = R - E

Given P = 1/3 E hence can find the gross profit was what percent of its revenue?

2) P = R- E

Given E = 3/4R

Hence can find the percent.
Senior Manager  Joined: 10 Oct 2005
Posts: 423
Location: US
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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D it is. GP + Expense = Revenue.

Since we need a ratio of GP/Revenue, we need not know actually value of GP/Expense. We need to get one ratio between two of the any three variables.
Manager  Joined: 21 May 2007
Posts: 112
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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In 1999, Company X's gross profit was what percent of its revenue?

1. In 1999, Company X's gross profit was 1/3 of its expenses.

2. In 1999, Company X's expenses were 3/4 of its revenue

~parsifal
SVP  Joined: 29 Aug 2007
Posts: 2129
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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parsifal wrote:
In 1999, Company X's gross profit was what percent of its revenue?

1. In 1999, Company X's gross profit was 1/3 of its expenses.
2. In 1999, Company X's expenses were 3/4 of its revenue

~parsifal

D.

1. gp = (1/3) e
e = 3gp
r = e + gp
r = 3gp + gp
r = 4gp

gp/r = gp/4gp = 1/4 = 25%.. suff.

2. e = (3/4) r
gp = r - e
gp = r - (3/4)r
gp = (1/4)r

again gp/r = 25%.
Director  Joined: 09 Aug 2006
Posts: 647
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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parsifal wrote:
In 1999, Company X's gross profit was what percent of its revenue?

1. In 1999, Company X's gross profit was 1/3 of its expenses.

2. In 1999, Company X's expenses were 3/4 of its revenue

~parsifal

D.

Stat 1:
Expenses = x
GP = 1/3x
Rev. = x-1/3x = 2/3x
Suff.

Stat 2"
Rev. = x
Exp. = 3/4x
GP = x-3/4x
Suff.
VP  Joined: 28 Dec 2005
Posts: 1315
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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same approach as above, and same answer ... D
Current Student Joined: 31 Aug 2007
Posts: 357
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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this question, from gmatprep, seems pretty nasty to me:

In 1999, Company X's gross profit was what percent of its revenue?

1. In 1999, Company X's gross profit was 1/3 of its expenses.

2. In 1999, Company X's expenses were 3/4 of its revenue

I could have easily guessed the correct answer, but no where does it strictly state that GP=Rev-Expenses
I thought this was a trick question so I selected E since no formulaic information was given...does anyone else agree that this question is bogus? Now when I take the test, I may keep second-guessing myself about if I'm making too many assumptions, or not enough assumptions.
Director  Joined: 23 Sep 2007
Posts: 682
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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the question is tricky, but it is technically correct.

"gross" Profit = Revenue - Expense is the standard

"net" profit is where you might have to figure in taxes.
VP  Joined: 17 Jun 2008
Posts: 1065
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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young_gun wrote:
this question, from gmatprep, seems pretty nasty to me:

In 1999, Company X's gross profit was what percent of its revenue?

1. In 1999, Company X's gross profit was 1/3 of its expenses.

2. In 1999, Company X's expenses were 3/4 of its revenue

I could have easily guessed the correct answer, but no where does it strictly state that GP=Rev-Expenses
I thought this was a trick question so I selected E since no formulaic information was given...does anyone else agree that this question is bogus? Now when I take the test, I may keep second-guessing myself about if I'm making too many assumptions, or not enough assumptions.

This question does not require any formula of profit and loss or revenue and expenses.Just we got to treat this as a set of equations :
Question:p=x(r) x=? p=profit r=revenue

consider (1) : p=1/3 * e but here we cant get relation between e and r hence does not answer =>insufficient

consider (2) : e=3/4 * r => this does not solve since we dont know hows e related to p again =>? insufficient
consder (1) and (2) => p=1/3*e and e=3/4 * r =>
p = 1/3 * 3/4 * r => hence x=1/4 => sufficient

IMO C
I hope no where we require actual formulae and stuff here it uses a direct linear relation between variables
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Intern  Joined: 06 May 2009
Posts: 39
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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I got this question in gmatprep test today

In 1999 Company X's gross profit was what percent of its revenue?

A) In 1999 Comapny X's gross profit was 1/3 of its expenses.
B) In 1999 Company X's expenses were 3/4 of its revenue.
Intern  Joined: 10 Jul 2009
Posts: 38
Re: In 1999, Company X's gross profit was what percent of its  [#permalink]

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My answer is D. you can easily find Profit-Revenue relationship from both statements. Re: In 1999, Company X's gross profit was what percent of its   [#permalink] 09 Aug 2009, 04:01

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