The graph on the left shows the annual revenue growth of Company X ove

Question

Tough and Tricky questions: Percents. https://gmatclub.com/forum/download/file.php?id=25157 The graph on the left shows the annual revenue growth of Company X over the prior year’s revenue. The graph on the right shows the tax rate as a percent of revenue. In which year did Company X pay the greatest amount in taxes? A. 2000 B. 2001 C. 2002 D. 2003 E. 2004 Kudos for a correct solution . 2014-12-30_1903.png

littlewarthog · Answer

It seems there is an attachment missing.

Bunuel · Answer

Added the attachment. Thank you for noticing.

littlewarthog · Answer

From the left chart, we can see that the revenue has been growing from year to year. Since the growth is always positive, the revenue of any given year was higher than the revenue of the previous year.

From the right chart, we can see that the tax rate was 25% in the years 2001 and 2003. Since the revenue in 2003 was higher than in 2001, this must be the year with the most tax paid.

The answer choices try to trick us into choosing Answer E. However, since the charts end with the year 2003, we do not have any information on the tax burden in year 2004. Therefore, Answer D is correct.

PareshGmat · Answer

Answer = D. 2003

LHS Graph

It shows "Revenue growth" which is always up compared to previous year. So, highest revenue would be in the last year shown = 2003

RHS Graph

Highest tax % is in 2001 & 2003

With tax = 25%, more the revenue, more would be the tax.

So highest tax paid would be in 2003

beattheheat · Answer

Revenue has increased all these years.
Tax % is highest for 2001 and 2003, but since revenue is higher in 2003 thus tax amount is highest for 2003
Answer D

Bunuel · Answer

OFFICIAL SOLUTION:

(D) By looking at the charts, we can avoid performing calculations:

Since revenue growth is always positive, total revenue for Company X rose every year. Therefore, total revenue in 2003 was the highest (although the growth rate is lower than prior years). For example, if revenue in '99 was $100, by '00 it is $104.

Because the tax rate was also the highest in 2003, the taxes paid must have been the highest that year because that is also the year with the highest revenues.

The correct answer is choice (D).

mvictor · Answer

I say we can eliminate right away E, as there is no info on 2004.

1st year suppose we have 100$. 
00 year = 104$ revenue, paid taxes: 20.8$
01 year = increase by 5% ok, so 10.4 is 10% and 5.2 is 5%. we thus have revenue 109.2$. paid taxes divide this number by 4: 27.3$ - A is out.
02 year = revenue up by 4%, last year revenue was 109.2$ or 1.09$ is 1%, 4%=4.36$. revenue in 02 = 113.56$. paid taxes: 10% or 11.35$ - C is out.

we are left with B and D only.

03 - revenue up by 2% from last year, and taxes paid 25%. don't actually need to calculate.

we have year 01 with 109.2$ revenue and 25% tax paid
and we have year 03, with much more revenue, and the same 25% tax paid. of course, when the revenue is greater, the 25% will be greater.
we can clearly eliminate B, and select with confidence D.

bumpbot · Answer

Automated notice from GMAT Club BumpBot:

A member just gave Kudos to this thread, showing it’s still useful. I’ve bumped it to the top so more people can benefit. Feel free to add your own questions or solutions.

This post was generated automatically.

The graph on the left shows the annual revenue growth of Company X ove

Prep Toolkit

Top 5 GMAT Debrief Videos

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards

GMAT Problem Solving (PS) Questions

The graph on the left shows the annual revenue growth of Company X ove

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards