Zachary bought a house, refurbished it, and sold it. Buying and refurb

Question

Zachary bought a house, refurbished it, and sold it. Buying and refurbishing were the only costs that Zachary incurred in the transaction. What percentage of the selling price of the house was the total amount that Zachary spent on buying and refurbishing it?

(1) At the same selling price, Zachary's gross profit from the sale would have been 40 percent higher if the total amount spent on buying and refurbishing had been 10 percent lower.

(2) At the same selling price, Zachary's gross profit from the sale would have been 20 percent lower if the total amount spent on buying and refurbishing had been 5 percent higher.

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ManifestDreamMBA · Answer

Let costs be c and selling price be s
c/s = ?

Statement 1
p = s-c
1.4(s-c) = s-0.9c
1.4s - 1.4c = s-0.9c
0.4s = .05c
c/s = 4/5
Sufficient

Statement 2
p = s-c
0.8(s-c) = s-1.05c
0.8s - 0.8c = s-1.05c
0.25c = 0.20 s
c/s = 4/5
Sufficient

Answer D

Dereno · Answer

Let the cost incurred in buying & refurbishment of a house be  c  
And the selling price be  s

Profit = selling price - cost price = s-c

To find c/s ?.

Statement 1:

(1) At the same selling price, Zachary's gross profit from the sale would have been 40 percent higher if the total amount spent on buying and refurbishing had been 10 percent lower.

Selling price remains same = s
profit = s-c , but given profit is 40% higher.

c is 10 % lower = 90/100 c

140/100 * (s-c) = s- 90/100 c 
 1.4s - 1.4c = s - 0.9c

0.4 s = 0.5 c

c/s = 4/5 = 80%

Hence  sufficient  .

Statement 2:

(2) At the same selling price, Zachary's gross profit from the sale would have been 20 percent lower if the total amount spent on buying and refurbishing had been 5 percent higher.

20% lower = 0.8 (s-c) 
c = 1.05 c

0.8 (s-c) = s - 1.05 c

0.8 s - 0.8 c = s - 1.05 c

0.25 c = 0.20 s

c/s = 4/5 = 80%

Hence  Sufficient

option D

Zachary bought a house, refurbished it, and sold it. Buying and refurb

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GMAT Data Sufficiency (DS) Questions

Zachary bought a house, refurbished it, and sold it. Buying and refurb

Prep Toolkit

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

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