A certain business spends 1/2 of its revenue on payroll, 1/4 on invent

Question

A certain business spends 1/2 of its revenue on payroll, 1/4 on inventory, and 1/5 on healthcare. If the remaining $200,000 of revenue is issued as dividends, what is the business's total revenue?

A. $2 million
B. $3 million
C. $4 million
D. $4.5 million
E. $5 million

BrentGMATPrepNow · Answer

To get a better idea of what's going on, let's rewrite the 3 fractions (1/2, 1/4 and 1/5) with a common denominator (20).

We get:   A certain business spends 10/20 of its revenue on payroll, 5/20 on inventory, and 4/20 on healthcare.   
10/20 + 5/20 + 4/20 = 19/20
So, we have accounted for 19/20 of the revenue. 
In other words, 1/20 of the revenue is not accounted for.

The remaining $200,000 of revenue is issued as dividends  
So, $200,000 represents 1/20 of the revenue
We can write: $200,000 = 1/20(revenue)
To solve for "revenue," we can multiply both sides by 20 to get: $4,000,000 = revenue

Answer: C

matthewsmith_89 · Answer

1- (1/2 + 1/4 + 1/5)
1 - (10/20 + 5/20 + 4/20)
1/20

1/20x = 200,000
x = 4,000,000

Which is answer C

EMPOWERgmatRichC · Answer

Hi All,

This question can be solved by TESTing THE ANSWERS.

We're told that a business spends 1/2 of its revenue on payroll, 1/4 on inventory, 1/5 on healthcare and the REMAINING $200,000 is issued as dividends. We're asked for the business's TOTAL revenue?

Let's TEST Answer B: $3 million

1/2 of $3 million = $1.5 million
1/4 of $3 million = $0.75 million
1/5 of $3 million = $0.6 million
Total = $2.85 million, which leaves $150,000 for dividends. This is TOO LOW; there needs to be MORE revenue. Notice how $200,000 is exactly 1/3 greater than $150,000.... maybe we're looking for a total that is exactly 1/3 greater than $3 million.....

Let's TEST Answer C: $4 million

1/2 of $4 million = $2 million
1/4 of $4 million = $1 million
1/5 of $4 million = $0.8 million
Total = $3.8 million, which leaves $200,000 for dividends. This is an exact match for what we were told, so this MUST be the answer.

Final Answer:  C

GMAT assassins aren't born, they're made,
Rich

pushpitkc · Answer

Converting into percentages, 1/2 is 50%, 1/4 is 25% and 1/5 is 20%
Adding the above, we get 95%. Also, it is given the remaining 5% is 200000$

Hence total is 100% = 200000*20 = $4 million(Option C)

ppcm · Answer

Why is the OA E ? I think the answer should be C...

Bunuel · Answer

Yes, it's C. Edited the OA. Thank you.

mvictor · Answer

the quickest way is to put everything in fractions, or even decimals..
0.5 - payroll
0.25 - inventory
0.2 - healthcare
total: 0.95

remaining, 0.05 of revenue is 200,000.
now... 0.1 would be 400,000
1 would be 4,000,000

no need of any complex operations...

JeffTargetTestPrep · Answer

We can let t = total revenue, and we can create the following equation:

(1/2)t + (1/4)t + (1/5)t + 200,000 = t

Multiplying the entire equation by 20, we have:

10t + 5t + 4t + 4,000,000 = 20t

4,000,000 = t

Answer: C

A certain business spends 1/2 of its revenue on payroll, 1/4 on invent

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A certain business spends 1/2 of its revenue on payroll, 1/4 on invent

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