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25 Dec 2017, 00:49
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Difficulty:

35% (medium)

Question Stats:

75% (01:00) correct 25% (00:08) wrong based on 24 sessions

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Richard's Roto-Rooter service has budgeted $5,000 to spend on drain-cleaning equipment. If this money has to pay for the equipment and for any sales taxes that will be added to the price of the item, does the business have 500 dollars left after purchasing the equipment? (1) The sales tax on the equipment was 10%. (2) The total price of the equipment was less than$4,000.
[Reveal] Spoiler: OA

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Re: Richard's Roto-Rooter service has budgeted $5,000 to spend on drain-cl [#permalink] ### Show Tags 25 Dec 2017, 01:39 Bunuel wrote: Richard's Roto-Rooter service has budgeted$5,000 to spend on drain-cleaning equipment. If this money has to pay for the equipment and for any sales taxes that will be added to the price of the item, does the business have 500 dollars left after purchasing the equipment?

(1) The sales tax on the equipment was 10%.
(2) The total price of the equipment was less than $4,000. Caclulating the total amount of money requires two numbers - the cost before tax and the percent tax. So we'll see if our data gives us these numbers. This is a Logical approach. (1) gives us only the percent tax. Insufficient. (2) gives us only the cost before tax. Insufficient. Combined, we have both items and can find a solution. (4,000 + 10% = 4,400,$600 less than $5,000) (C) is our answer. _________________ David Senior tutor at examPAL Signup for a free GMAT course We won some awards: Join our next webinar (free) Save up to$250 on examPAL packages (special for GMAT Club members)

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Re: Richard's Roto-Rooter service has budgeted $5,000 to spend on drain-cl [#permalink] ### Show Tags 25 Dec 2017, 18:42 1 This post received KUDOS Bunuel wrote: Richard's Roto-Rooter service has budgeted$5,000 to spend on drain-cleaning equipment. If this money has to pay for the equipment and for any sales taxes that will be added to the price of the item, does the business have 500 dollars left after purchasing the equipment?

(1) The sales tax on the equipment was 10%.
(2) The total price of the equipment was less than $4,000. Question: $$Eprice+Etax ≤4500?$$ If yes, than the biz has 500 left after purchase, if not then it doesn't have 500 left after purchase. (1) The sales tax on the equipment was 10%. So $$Etax = 0.10*Eprice$$, but since we don't know $$Eprice$$; insufficient. (2) The total price of the equipment was less than$4,000. So $$0<Eprice<4000$$, but we don't know $$Etax$$; insufficient.

(1)+(2). The possible value is: $$Eprice+Etax =3999*(0.10*3999)=~4400<4500$$, thus answer is yes, we have 500 left after purchase; sufficient.