GMAT Question of the Day - Daily to your Mailbox; hard ones only

It is currently 16 Oct 2019, 12:46

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

The Green Life company turned in a first-year profit of $5,000.

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

Find Similar Topics 
Manager
Manager
User avatar
P
Joined: 03 Mar 2018
Posts: 206
The Green Life company turned in a first-year profit of $5,000.  [#permalink]

Show Tags

New post 17 Apr 2018, 08:52
4
00:00
A
B
C
D
E

Difficulty:

  65% (hard)

Question Stats:

60% (01:53) correct 40% (02:09) wrong based on 100 sessions

HideShow timer Statistics

The Green Life company turned in a first-year profit of $5,000. In its second year, its profit is $8,000. If revenue grew 15% in that period while costs were constant, what were its second-year revenues?

(A) $15,000
(B) $20,000
(C) $23,000
(D) $26,500
(E) $27,800

_________________
Please mention my name in your valuable replies.
Senior Manager
Senior Manager
User avatar
G
Joined: 29 Dec 2017
Posts: 379
Location: United States
Concentration: Marketing, Technology
GMAT 1: 630 Q44 V33
GMAT 2: 690 Q47 V37
GMAT 3: 710 Q50 V37
GPA: 3.25
WE: Marketing (Telecommunications)
The Green Life company turned in a first-year profit of $5,000.  [#permalink]

Show Tags

New post 17 Apr 2018, 08:59
1 year: Revenue - Cost = 5 000
- (minus)
2 year: Revenue*1.15 - Cost = 8 000
______________________________
Revenue = 20 000 => Revenue*1.15 = 23 000 . Answer (C)
Manager
Manager
User avatar
B
Joined: 03 Apr 2016
Posts: 89
Location: India
Concentration: General Management, Leadership
Schools: ISB '19, IIMB EPGP"20
GMAT 1: 580 Q43 V27
GMAT 2: 650 Q32 V48
GRE 1: Q160 V151
GPA: 3.99
WE: Design (Consulting)
GMAT ToolKit User Reviews Badge
Re: The Green Life company turned in a first-year profit of $5,000.  [#permalink]

Show Tags

New post 17 Apr 2018, 10:26
Interesting question with a common trap.
year 1: 5000 = S1-C where S1 is the selling price in year 1 and C is the cost price
Year2: 8000= S2-C where S2 is selling price in year 2 and C is the cost price.
From the question, C is same in both years and S2= 1.15 S1
So upon solving the above equations we obtain S1=20,000 (Option B ) Here is the trap!!!!!!
The question is asking for the selling price or revenue in year 2 but not in year 1.
So we need to calculate S2 = 1.15*20,000 = 23,000 (Option C)
Target Test Prep Representative
User avatar
G
Status: Head GMAT Instructor
Affiliations: Target Test Prep
Joined: 04 Mar 2011
Posts: 2816
Re: The Green Life company turned in a first-year profit of $5,000.  [#permalink]

Show Tags

New post 19 Apr 2018, 17:56
1
2
itisSheldon wrote:
The Green Life company turned in a first-year profit of $5,000. In its second year, its profit is $8,000. If revenue grew 15% in that period while costs were constant, what were its second-year revenues?

(A) $15,000
(B) $20,000
(C) $23,000
(D) $26,500
(E) $27,800



Since profit = revenue - cost, we can let r = 1st-year revenue and c = 1st-year cost. Thus 1.15r = 2nd-year revenue and c = 2nd-year cost and we can create the following two equations:

5,000 = r - c

c = r - 5000

and

8,000 = 1.15r - c

Substituting, we have:

8,000 = 1.15r - (r - 5000)

8000 = 1.15r - r + 5000

3000 = 0.15r

20,000 = r

Since the first-year revenue is $20,000, the second-year revenue is 1.15 x 20,000 = $23,000.

Answer: C
_________________

Jeffrey Miller

Head of GMAT Instruction

Jeff@TargetTestPrep.com
TTP - Target Test Prep Logo
122 Reviews

5-star rated online GMAT quant
self study course

See why Target Test Prep is the top rated GMAT quant course on GMAT Club. Read Our Reviews

If you find one of my posts helpful, please take a moment to click on the "Kudos" button.

Director
Director
avatar
P
Joined: 02 Oct 2017
Posts: 720
Re: The Green Life company turned in a first-year profit of $5,000.  [#permalink]

Show Tags

New post 02 May 2018, 06:33
S-C=5000. First year
S1-C=8000. Second year

S1=115*S/100

Two eqn solve
S=20,000
But question is asking about S1=1.15S=23000

Posted from my mobile device
_________________
Give kudos if you like the post
GMAT Club Bot
Re: The Green Life company turned in a first-year profit of $5,000.   [#permalink] 02 May 2018, 06:33
Display posts from previous: Sort by

The Green Life company turned in a first-year profit of $5,000.

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  





Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne