Hi All,

We're told that Profit = Revenue - Costs and that costs will remain constant from 2007 to 2008, while revenues INCREASE by 10% in that same period. We're asked for the percent increase in PROFITS from 2007 to 2008. This question comes down to some Arithmetic and the Percentage Change Formula. In addition, since the answer choices are sufficiently 'spread out', we can use estimation to save some calculation time...

Profit in 2007 = (Revenue in 2007) - (Costs in 2007) = 1052 - 749 = an estimate of 1050 - 750 = 300

We're told that, in 2008, Revenue will INCREASE by 10% while Costs will stay the same...

Profit in 2008 = (Revenue in 2008) - (Costs in 2008) =
(1.1)(1050) - 750 =
1155 - 750 =
405

Percentage Change = (New - Old)/(Old) = (Difference)/(Original) = (405 - 300)/(300) = 105/300 = a little more than 1/3 = a little more than 33%

Final Answer: C

GMAT assassins aren't born, they're made,
Rich

AAPL wrote:Magoosh

The following tables show the revenues and costs, in thousands of dollars, for a small company in the year 2007



Profit = Revenue - Costs. If costs remain constant from 2007 to 2008, and if revenues increase by 10% in that same period, by what percent will profits increase from 2007 to 2008?

A. 11.6%
B. 25.8%
C. 34.7%
D. 71.2%
E. 116.3%

Profits in 2007 are 1052 - 749 = 303

Profits in 2008 are 1.1(1052) - 749 = 1157.2 - 749 = 408.2

We use the percent increase formula: (New - Old)/Old x 100, and we obtain:

(408.2 - 303)/303 x 100 = 105.2/303 x 100 = 34.7%

Answer: C