Last visit was: 08 Dec 2024, 06:38 It is currently 08 Dec 2024, 06:38
Home
GMAT
Messages
Tests
Schools
Reviews
Social
Chat
My Profile
Close
GMAT Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Go to My Error Log Learn more
Close
Request Expert Reply
Confirm Cancel
Back to Forum
Create Topic
655-705 Level|   Word Problems|               
User avatar
parkhydel
User avatar
Joined: 03 Jun 2019
Last visit: 28 Oct 2024
Posts: 217
Own Kudos:
13,683
 [133]
Given Kudos: 54
Posts: 217
Kudos: 13,683
 [133]
Was Store K's profit last month at least 10 percent greater than its 28 Apr 2020, 05:13
5
Kudos
Add Kudos
128
Bookmarks
Bookmark this Post
00:00
Start Timer
Pause Timer
Resume Timer
Show Answer
Hide
Show
History
C
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!

Difficulty:

65% (hard)

Question Stats:

61% (01:57) correct 39% (01:55) wrong based on 1880 sessions

History

Date
Time
Result
Not Attempted Yet
Was Store K's profit last month at least 10 percent greater than its profit the previous month?

(1) Store K's expenses last month were 5 percent greater than its expenses the previous month.
(2) Store K's revenues last month were 10 percent greater than its revenues the previous month.


ID: 700296
DS97030.02­
ShowHide Answer
Official Answer
C
Most Helpful Reply
User avatar
BrentGMATPrepNow
User avatar
GMAT Club Legend
Joined: 12 Sep 2015
Last visit: 13 May 2024
Posts: 6,786
Own Kudos:
32,151
 [43]
Given Kudos: 799
Location: Canada
Expert reply
Posts: 6,786
Kudos: 32,151
 [43]
Was Store K's profit last month at least 10 percent greater than its 28 Apr 2020, 07:54
20
Kudos
Add Kudos
23
Bookmarks
Bookmark this Post
parkhydel
Was Store K's profit last month at least 10 percent greater than its profit the previous month?

(1) Store K's expenses last month were 5 percent greater than its expenses the previous month.
(2) Store K's revenues last month were 10 percent greater than its revenues the previous month.

DS97030.02

Target question: Was Store K's profit last month at least 10 percent greater than its profit the previous month?

IMPORTANT: Profit = Revenue - Expenses

Statement 1: Store K's expenses last month were 5 percent greater than its expenses the previous month.
Since we have no information about revenue, there is no way to compare profits.
Statement 1 is NOT SUFFICIENT

Statement 2: Store K's revenues last month were 10 percent greater than its revenues the previous month.
Since we have no information about expenses, there is no way to compare profits.
Statement 2 is NOT SUFFICIENT

Statements 1 and 2 combined
Important concepts: If X is 5% greater than Y, then X = 1.05Y, and if X is 10% greater than Y, then X = 1.10Y.
If we let R = the revenue from the previous month, then (from statement 2), 1.1R = the revenue from last month.
If we let E = the expenses from the previous month, then (from statement 1), 1.05E = the expenses from last month.

The target question asks Was Store K's profit last month at least 10 percent greater than its profit the previous month?
In other words, Was Store K's profit last month greater than or equal to a value that's 10 percent greater than its profit the previous month?
In other words: Is 1.10R - 1.05E ≥ 1.10(R - E)?
Expand the right side to get: Is 1.10R - 1.05E ≥ 1.10R - 1.10E?
Add 1.10E to both sides of the inequality to get: Is 1.10R + 0.05E ≥ 1.10R?
Subtract 1.10R from both sides to get: Is 0.05E ≥ 0?
The answer to this rephrased target question is a definite YES (since we can assume E ≥ 0, which means 0.05E ≥ 0)
Since we can answer the target question with certainty, the combined statements are SUFFICIENT

Answer: C

Cheers,
Brent
User avatar
itspCv2
User avatar
Joined: 06 May 2020
Last visit: 18 Jun 2021
Posts: 32
Own Kudos:
97
 [10]
Given Kudos: 11
Location: India
Schools: HEC '22
Schools: HEC '22
Posts: 32
Kudos: 97
 [10]
Was Store K's profit last month at least 10 percent greater than its 11 May 2020, 13:12
9
Kudos
Add Kudos
1
Bookmarks
Bookmark this Post
parkhydel
Was Store K's profit last month at least 10 percent greater than its profit the previous month?

(1) Store K's expenses last month were 5 percent greater than its expenses the previous month.
(2) Store K's revenues last month were 10 percent greater than its revenues the previous month.

DS97030.02

STRAIGHT to POINT: Profit(P)=revenue(R)-expense(E)
' is used for last month and no numenation :plain E,P,R for previous month


1)E'=1.05E>>Insufficient
2)R'=1.10R >>Insufficient

Now combined(C): R'-E'=1.10R-1.05E----->>> difference between last month and now-->>P'-P=(R'-E')-(R-E)=.10R-.05E

Now is .10R-.05E>.10(R-E) ?
YES IT is using some sense
.10R-.05E>.10R-.10E
since substracting small number>>> greater value>>> LHS>RHS in above equation

Therefore C

HOPE THIS HELPS

THANKS :thumbsup:
General Discussion
avatar
UmmahaniAkter
avatar
Joined: 09 Dec 2017
Last visit: 18 Sep 2023
Posts: 3
Own Kudos:
9
 [9]
Given Kudos: 505
Posts: 3
Kudos: 9
 [9]
Was Store K's profit last month at least 10 percent greater than its 22 Aug 2020, 06:44
5
Kudos
Add Kudos
4
Bookmarks
Bookmark this Post
parkhydel
Was Store K's profit last month at least 10 percent greater than its profit the previous month?

(1) Store K's expenses last month were 5 percent greater than its expenses the previous month.
(2) Store K's revenues last month were 10 percent greater than its revenues the previous month.

DS97030.02


We can pick easy numbers here.

AS we know Profit=Revenue-Expense

Suppose, Previous Month Revenue=200 , Expense = 100 ; Profit=100

Statement1: Expense=100*1.05=105; no information about the revenue, so not sufficient.
Statement1: Last Month Revenue=200*1.10=220, no information about the expense, so not sufficient

Combine both statements, Profit=115

last month at least 10 percent greater than its profit the previous month

as, 115-100/100*100 =15%
avatar
TarunKumar1234
avatar
Joined: 14 Jul 2020
Last visit: 28 Feb 2024
Posts: 1,110
Own Kudos:
1,314
Given Kudos: 351
Location: India
Posts: 1,110
Kudos: 1,314
Was Store K's profit last month at least 10 percent greater than its 18 Sep 2020, 09:06
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Let's Say, First Expenses= E, then new expenses= 1.05E

First Revenue = R, then new revenue= 1.1R

So, First Profit= R- E and, new profit = 1.1R - 1.05E = 1.1R - 1.1E +0.05 E = 1.1 (first profit) + 0.05E

So, minimum 10% profit increases.

So, Both stats are not individually sufficient. Both combined stats are sufficient. So, option C.
avatar
mryan01867
avatar
Joined: 12 Aug 2016
Last visit: 12 Jul 2021
Posts: 1
Posts: 1
Kudos: 0
Was Store K's profit last month at least 10 percent greater than its 14 Nov 2020, 13:47
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Still a bit unsure about the reasoning behind C. Can't profit also be negative (net loss)?

For example, if Revenue was $100 and Expenses was $300. This would be a negative profit of -$200.

Taking both 1 + 2 into the next month gives us a Revenue of $110 and Expenses of $315. Giving a negative profit of -$205. This is then less.

Let me know what I am doing wrong.
avatar
TarunKumar1234
avatar
Joined: 14 Jul 2020
Last visit: 28 Feb 2024
Posts: 1,110
Own Kudos:
1,314
Given Kudos: 351
Location: India
Posts: 1,110
Kudos: 1,314
Was Store K's profit last month at least 10 percent greater than its 15 Nov 2020, 05:11
Kudos
Add Kudos
Bookmarks
Bookmark this Post
mryan01867

Profit can't be negative. So, you can try with another set of example, Option C holds true.
avatar
njp1
avatar
Joined: 26 Nov 2020
Last visit: 02 Jul 2021
Posts: 16
Own Kudos:
5
 [1]
Given Kudos: 4
Posts: 16
Kudos: 5
 [1]
Was Store K's profit last month at least 10 percent greater than its 02 Dec 2020, 19:55
Kudos
Add Kudos
Bookmarks
Bookmark this Post
This is really one of the questions that you dont even have to spend time solving. If you dont have revenue AD are not sufficient. if you don't have expenses B is not sufficient pick C
avatar
1201Seattle
avatar
Joined: 14 Jan 2021
Last visit: 28 Apr 2021
Posts: 1
Own Kudos:
1
 [1]
Posts: 1
Kudos: 1
 [1]
Was Store K's profit last month at least 10 percent greater than its 14 Jan 2021, 16:31
1
Kudos
Add Kudos
Bookmarks
Bookmark this Post
BrentGMATPrepNow

I don't see how this is correct. We do not know the relationship between Revenue & Expenses. For example: what if expenses in the previous month were $1,000,000 put Revenue was $1 (an extreme example). A 5% increase in expenses would result in significantly less profit than the previous month while if we reversed the amounts profit would significantly increase. The question forces the taker to assume the company is profitable which cannot be inferred. Should I just always assume a company is profitable in GMAT questions...very poor test question from the makers of the GMAT.

Please elaborate on the logic.
User avatar
BrentGMATPrepNow
User avatar
GMAT Club Legend
Joined: 12 Sep 2015
Last visit: 13 May 2024
Posts: 6,786
Own Kudos:
32,151
 [5]
Given Kudos: 799
Location: Canada
Expert reply
Posts: 6,786
Kudos: 32,151
 [5]
Was Store K's profit last month at least 10 percent greater than its 14 Jan 2021, 17:07
4
Kudos
Add Kudos
1
Bookmarks
Bookmark this Post
Quote:
Was Store K's profit last month at least 10 percent greater than its profit the previous month?

(1) Store K's expenses last month were 5 percent greater than its expenses the previous month.
(2) Store K's revenues last month were 10 percent greater than its revenues the previous month.


1201Seattle
BrentGMATPrepNow

I don't see how this is correct. We do not know the relationship between Revenue & Expenses. For example: what if expenses in the previous month were $1,000,000 put Revenue was $1 (an extreme example). A 5% increase in expenses would result in significantly less profit than the previous month while if we reversed the amounts profit would significantly increase. The question forces the taker to assume the company is profitable which cannot be inferred. Should I just always assume a company is profitable in GMAT questions...very poor test question from the makers of the GMAT.

Please elaborate on the logic.

Great question!

The main idea here is that:
- if expenses are less than revenue, we have a profit.
- if expenses are greater than revenue, we have a loss.

Since the question uses the word profit , we can conclude that revenue exceeded expenses in both months.
User avatar
Mazba95
User avatar
Joined: 20 Jan 2019
Last visit: 18 Nov 2022
Posts: 5
Own Kudos:
6
 [1]
Given Kudos: 39
Posts: 5
Kudos: 6
 [1]
Was Store K's profit last month at least 10 percent greater than its 21 Jan 2021, 04:38
1
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Statement 1: Not Sufficient, Since we don't have any info about revenue. So, A and D are out.
Statement 2: Not Sufficient, Since we don't have any inform about expense. So, B is out.
Now we need to check whether both statements together are sufficient.
Let's,
Previous month's revenue = $200
Previous month's expenses = $100
Profit = $200- $100 = $100
So,
Last month revenue = $200*1.1 = $220
Last month expense = $100*1.05 = $105
Profit = $220-$105 = $115
As we can compare the profits between two periods, we can say both statements together are sufficient even if the profit is 10% higher or not.
Just to check,
The profits increased = ($115-$100)/$100 = 15%.
Answer: C

Is this a correct approach? Please
User avatar
AnkurGMAT20
User avatar
Joined: 12 Jul 2020
Last visit: 07 Dec 2024
Posts: 141
Own Kudos:
631
Given Kudos: 265
Location: India
Schools: IIM IIM IIM IIM
GMAT Focus 1: 615 Q79 V83 DI79
GMAT 1: 530 Q42 V20
GMAT 2: 640 Q48 V29
GPA: 6.23
Products:
Forum Quiz
Schools: IIM IIM IIM IIM
GMAT Focus 1: 615 Q79 V83 DI79
GMAT 2: 640 Q48 V29
Posts: 141
Kudos: 631
Was Store K's profit last month at least 10 percent greater than its 18 Dec 2021, 01:24
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Statement 1 and 2 are not sufficient on their own. Let's directly jump to 1+2,

Let Store K previous Month Revenue (R1)= 100 and Expense (E1)= 90. Hence, Profit(P1) = 10 (Profit = Revenue- Expense)

Now, Store K last month Revenue will be = 10% of R1 i.e. 110.

And Expense will be = 5% of E1 i.e. 94.5. Hence, the profit(P2) for last month will be (110-94.5) = 15.5.

We have profit values of both the months and can find if profit last month at least 10 percent greater than its profit the previous month.

No need to solve further.

Option 'C' is the right answer.
User avatar
woohoo921
User avatar
Joined: 04 Jun 2020
Last visit: 17 Mar 2023
Posts: 531
Own Kudos:
108
Given Kudos: 623
Posts: 531
Kudos: 108
Was Store K's profit last month at least 10 percent greater than its 21 Dec 2022, 07:23
Kudos
Add Kudos
Bookmarks
Bookmark this Post
parkhydel
Was Store K's profit last month at least 10 percent greater than its profit the previous month?

(1) Store K's expenses last month were 5 percent greater than its expenses the previous month.
(2) Store K's revenues last month were 10 percent greater than its revenues the previous month.

DS97030.02

avigutman

To follow-up, you mentioned in this video (https://www.youtube.com/watch?v=x6lQeAPoGuQ) that knowing the difference between two tick marks on the number line does not enable you to find their ratio.

However, in a problem like this, if you know the percentage difference between variables, you are able to find their ratio, correct?

Do you have a general rule for percentage differences? Thanks again!
User avatar
avigutman
User avatar
Joined: 17 Jul 2019
Last visit: 03 Oct 2024
Posts: 1,298
Own Kudos:
1,844
Given Kudos: 66
Location: Canada
Schools: NYU Stern (WA)
GMAT 1: 780 Q51 V45
GMAT 2: 780 Q50 V47
GMAT 3: 770 Q50 V45
Expert reply
Schools: NYU Stern (WA)
GMAT 3: 770 Q50 V45
Posts: 1,298
Kudos: 1,844
Was Store K's profit last month at least 10 percent greater than its 21 Dec 2022, 14:25
Kudos
Add Kudos
Bookmarks
Bookmark this Post
woohoo921
parkhydel
Was Store K's profit last month at least 10 percent greater than its profit the previous month?

(1) Store K's expenses last month were 5 percent greater than its expenses the previous month.
(2) Store K's revenues last month were 10 percent greater than its revenues the previous month.

DS97030.02

avigutman

To follow-up, you mentioned in this video (https://www.youtube.com/watch?v=x6lQeAPoGuQ) that knowing the difference between two tick marks on the number line does not enable you to find their ratio.

However, in a problem like this, if you know the percentage difference between variables, you are able to find their ratio, correct?

Do you have a general rule for percentage differences? Thanks again!
Excellent question, woohoo921!
A percentage difference isn't really a difference at all. It's a ratio.
For example, a 20% increase means multiplying by 6/5. The ratio of the increased quantity to the original quantity is 120:100, or 6:5.
When people say "add 20%" it makes us imagine that we're dealing with an additive operation - that the 20% is a difference between two numbers. But, it's not, and we shouldn't say that we're adding 20%. Rather, we're increasing the original number by 20% (of itself).
This is why I split my book into two main sections, named Additive Reasoning and Multiplicative Reasoning (and, percent change lives entirely in the second section).
User avatar
bumpbot
User avatar
Non-Human User
Joined: 09 Sep 2013
Last visit: 04 Jan 2021
Posts: 35,774
Own Kudos:
928
Posts: 35,774
Kudos: 928
Was Store K's profit last month at least 10 percent greater than its 08 Jan 2024, 01:06
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
Moderator:
Bunuel
Math Expert
97629 posts