An importer wants to purchase N high-quality cameras from

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BTGmoderatorLU: Moderator; Posts: 2505; Joined: Sun Oct 15, 2017 1:50 pm; Followed by:6 members

An importer wants to purchase N high-quality cameras from

by BTGmoderatorLU » Sat Jan 04, 2020 10:44 am

Source: Magoosh

An importer wants to purchase N high-quality cameras from Germany and sell them in Japan. The cost in Germany of each camera is E euros. He will sell them in Japan at Y yen, which will bring in a profit, given that the exchange rate is C yen per euro. Given the exchange rate of D US dollar per euro, which of the following represents his profit in dollars?

A. N(YC-DE)
B. ND(YC-E)
C. ND[(Y/C)-E]
D. N[(Y/C)-DE]
E. ND(Y-E)/C

The OA is C

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Source: Beat The GMAT — Problem Solving | Sat Jan 04, 2020 10:44 am

deloitte247: Legendary Member; Posts: 2214; Joined: Fri Mar 02, 2018 2:22 pm; Followed by:5 members

by deloitte247 » Sun Jan 05, 2020 12:54 pm

Importer's purchase from Germany =>
Quality = n; price = euro (e)
Total cost = n * e = ne
Importer's sale in Japan =>
Quality = n; price = yen (y); exchange rate = yen per euro
Price = y/c euro and total sale = ny/c
$$Total\ profit\ in\ Euro=Total\ sale\ -\ Total\ \cos t\ =\ \frac{ny}{c}-\frac{ne}{1}$$
Exchange rate in dollars = 'd' us dollar per euro
$$Total\ profit\ in\ dollar=d\cdot\left(\frac{ny}{c}-ne\right)$$
$$=nd\cdot\left(\frac{y}{c}-e\right)$$

Answer = option C

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swerve: Legendary Member; Posts: 2499; Joined: Sun Oct 29, 2017 2:04 pm; Followed by:6 members

by swerve » Tue Jan 07, 2020 9:10 am

BTGmoderatorLU wrote:Source: Magoosh

An importer wants to purchase N high-quality cameras from Germany and sell them in Japan. The cost in Germany of each camera is E euros. He will sell them in Japan at Y yen, which will bring in a profit, given that the exchange rate is C yen per euro. Given the exchange rate of D US dollar per euro, which of the following represents his profit in dollars?

A. N(YC-DE)
B. ND(YC-E)
C. ND[(Y/C)-E]
D. N[(Y/C)-DE]
E. ND(Y-E)/C

The OA is C

Let us plug in:
N = 4, E = 3, Y = 8, C = 2, D = 2

The exchange rate is 2 yen per euro which means every euro is equal to 2 yen.

Cost 3 x 2 = 6 Yen
Revenue = 8 Yen
Profit per unit = 2 Yen
Total Profit = 2 x 4 = 8 Yen which is equal to 4 Euros

The exchange rate is 2 $ per euro hence the profit is 8 $.
Hence our target is 8:

A. N(YC - DE) = 4 (16 - 6) ELIMINATED $\Large{\color{red}\chi}$
B. ND(YC - E) = 8 (16 - 3) ELIMINATED $\Large{\color{red}\chi}$
C. ND[(Y/C) - E] = 8 (4 - 3) = 8 $\Large{\color{green}\checkmark}$
D. N[(Y/C) - DE] = 4 ( 4 - 6) ELIMINATED $\Large{\color{red}\chi}$
E. ND(Y - E)/C[/color] = 8 (5)/(2) ELIMINATED $\Large{\color{red}\chi}$

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by Scott@TargetTestPrep » Wed Jan 08, 2020 7:43 pm

BTGmoderatorLU wrote:Source: Magoosh

An importer wants to purchase N high-quality cameras from Germany and sell them in Japan. The cost in Germany of each camera is E euros. He will sell them in Japan at Y yen, which will bring in a profit, given that the exchange rate is C yen per euro. Given the exchange rate of D US dollar per euro, which of the following represents his profit in dollars?

A. N(YC-DE)
B. ND(YC-E)
C. ND[(Y/C)-E]
D. N[(Y/C)-DE]
E. ND(Y-E)/C

The OA is C

The cost of the N cameras is NE euros. Since 1 euro = D dollars, the cost of the cameras is NED dollars.

The revenue of the N cameras is NY yen. Since 1 euro = C yen, the revenue of the cameras is NY/C euros and since 1 euro = D dollars, the revenue is NYD/C dollars.

Therefore, the profit of the cameras, in dollars, is:

revenue - cost = NYD/C - NED = ND(Y/C - E)

Answer: C

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