Richard's Roto-Rooter service has budgeted $5,000 to spend on

Question

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.

(1) The sales tax on the equipment was 10%.
(2) The total price of the equipment was less than $4,000.

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ManifestDreamMBA · Answer

T = 5000
Let Price be P and Tax be T
P+T<5000

Is 5000 - P - T > 500?

Statement 1
T = 10%
We don't know P
Insufficient

Statement 2
P <4000
we don't know T
Insufficient

Combined, we have P <4000 and T=10%, which means T<400
P+T<4400
5000 - P - T < 600
Sufficient

GMATinsight · Answer

Question: Is price of equipment + Tax ≤ 4500?

Statement 1  :The sales tax on the equipment was 10%.
Price is unknown on which sales tax is to be calculated hence
  NOT SUFFICIENT

Statement 2  :The total price of the equipment was less than $4,000
Tax percentage is unknown hence
  NOT SUFFICIENT

Combining the statements 
Price < 4000
Tax = 10%
total Expense < 4000+tax
total Expense < 4400
  SUFFICIENT

Answer: Option C

Related Video:

https://www.youtube.com/watch?v=12jiNcz1MtU

Dereno · Answer

The Budget amount is $5000. 
$5000 = price of equipment P + sales tax ST

The question asks after spending for P and ST is the remaining amount $500 ???? ( verbatim)

Notation form :  $5000 - (P+ ST) = $500 ??

Let’s analyse the statements now 
  STATEMENT 1:

(1) The sales tax on the equipment was 10%.

given ST = 10% of the price P.
NOT sufficient.

STATEMENT 2: 
  
(2) The total price of the equipment was less than $4,000.
P < $4000.

Without knowing the ST. This statement is NOT SUFFICIENT.

combining statement 1 and statement 2:

lets assume P = $4000 . I have to take max value as $3999. In order to make calculations easier have taken $4000. 
ST = 10%($4000) = $400.

total price = $400 + $400 = $4400.

remaining amount is $5000- $4400= $600. Which is greater than $500.

Hence  option C

TC97 · Answer

I have a question for statement (2). Does "total price" include sales tax, or does it mean price before sales tax?

My logic is as follow:
Total price (total payment) = Price before sales tax * (1+ sales-tax rate)
Budgeted amount - expected saving last = 5,000 - 500 = 4,500
Question: total price ≤ 4,500?

(1) The sales tax on the equipment was 10%.
Price before sales tax * (1+10%) ≤ 4,500 ?
Price before sales tax is unknown, hence  insufficient .

(2) The total price of the equipment was less than $4,000.
Total price < 4,000 ≤ 4,500, hence  sufficient .

IMO,  option (B)  is the answer.

Richard's Roto-Rooter service has budgeted $5,000 to spend on

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GMAT Data Sufficiency (DS) Questions

Richard's Roto-Rooter service has budgeted $5,000 to spend on

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