The following figure shows the total Sources of Revenue and Expenditur

Question

The following figure shows the total Sources of Revenue and Expenditures for France in 1995 (in $ Billions). https://gmatclub.com/forum/download/file.php?mode=view&id=65858 1. What percentage of total Revenues was collected through Excise Taxes? GRAPH_1_PLACEHOLDER 2. What will be the percentage of expenditures on National Security of the total expenditures if the Government of France also tried to save money of $6 Billion in that year by keeping all the other expenditures and sources of revenues the same? GRAPH_2_PLACEHOLDER Source: Test-Guide 5.jpg

false9 · Answer

1. Ans. B.
Total excise tax collection as percentage of revenue = 32/220 = 14.54%

2. A. Keeping all other expenditures same, saving of $6 billion will be done through reducing expenditure on National Security by $6 billion. So new expenditure on National security = $65 billion.

Total expenditure = 220-6 = $214 billion.

% of expenditure on National security of total expenditure = 65/214 = 30.37%.

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soudipsengupta · Answer

1. What percentage of total Revenues was collected through Excise Taxes?

A. 12.54%
B. 14.54%
C. 15.54%
D. 13.54%

This is straightforward calculation from the pie-chart: 32*100/(32+20+6+92+70)=14.54%

2. What will be the percentage of expenditures on National Security of the total expenditures if the Government of France also tried to save money of $6 Billion in that year by keeping all the other expenditures and sources of revenues the same?

A. 30.37%
B. 31.45%
C. 32.89%
D. 33.56%

If GOVT wants to save 6 billion keeping all other expenses same, the reduction of expense must take place from National Security itself. Therefore 
percentage=(71-6)*100/(71-6+47+68+34) = 30.37%

Sr1994 · Answer

Total Revenue = R
Total Expenditure = E
Savings = S
National Security = N

1. 
Total revenue (R) = 32+20+6+92+70 = 220
 Excise tax = 32

Therefore, the percentage of total revenue collected through excise tax => 32 =  \frac{X}{100}  * 220 
=> X =  \frac{(32*100)}{220}  =  14.54%

Answer B

2.

R = 220

S = R - E
E = R - S
E = 220 - 6
 E = 214

All component in expenditures except National security remains the same. So, to have 6 billion savings, we have to subtract 6 from National Security
 N = 71 - 6 =  65

percentage of expenditures on National Security of the total expenditures => 65 =  \frac{X}{100}  * 214
=> X =  \frac{(65*100)}{214}  =  30.37%

Answer A

Harshil1200 · Answer

1.B(14.54%)
2.A(30.37%)

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sshwetima · Answer

1. What percentage of total Revenues was collected through Excise Taxes?

A. 12.54%
 B. 14.54% 
C. 15.54%
D. 13.54%

Total revenue - 220
%rev through excise tax = (32/220)*100 = 14.54%

2. What will be the percentage of expenditures on National Security of the total expenditures if the Government of France also tried to save money of $6 Billion in that year by keeping all the other expenditures and sources of revenues the same?

A. 30.37%
B. 31.45%
 C. 32.89% 
D. 33.56%

percentage of expenditures on National Security of the total expenditures = (71/220)*100 = 32%

Here the catch according to me is that even if Government of France also tried to save money of $6 Billion, that will account in net income that is net income = Revenue+ Savings + Expenditure

In problem we are asked about NS expense w.r.t total expenditure, not net income therefore savings would not have any impact

zhanbo · Answer

Question 1: 
Excise Tax: 32
Total: 32+20+6+92+70=220
32/220=0.1454...
Answer is  (B) .

Question 2:
National Security expenditure is reduced by 6: 71-6=65
Total expenditure: 65+68+47+34=214
65/214=0.3037...
Answer is  (A) .

raj94knp · Answer

Primary Broad Analysis- Total Revenue = 220; Total Expenditure = 220; so no gap. Lets move straight to question-
1. What percentage of total Revenues was collected through Excise Taxes?
Exp- Direct % calculation = revenue through excise /total revenue = 32/220 . We can easily infer that 15% of 220= 22+11 =33. So answer is just below 15%.  Which is B  
2.What will be the percentage of expenditures on National Security of the total expenditures if the Government of France also tried to save money of $6 Billion in that year by keeping all the other expenditures and sources of revenues the same?
Exp- Total Expenditure = 220; if saved $6, and all other factors constant then saving will be on  National Security  head. Thus total Expenditure=220-6= 214; Expenditure on National Security = 71-6=65;
So desired %= 65/214; Here 65 can be easily inferred as approx 30% of 220 so for 214 base desired % will be slightly higher.  Which is A

Sajjad1994 · Answer

Hello Everyone!

OA to the first question is B and the second is A; the same is also added in the question.

Good efforts everyone! The best explanation here is from  Sr1994 , I liked the format of the post.

Thank you!

srik410 · Answer

How did you all assume "Government of France also tried to save money of $6 Billion in that year" is the money saved on national security? You can save it on education or Medicare or the other category.

cheshire · Answer

The question is worded in poor english but it's assuming they only cut costs in national security. By keeping all others the same, only national security can receive budget adjustments.

The following figure shows the total Sources of Revenue and Expenditur

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