• NEW! FREE Beat The GMAT Quizzes
Hundreds of Questions Highly Detailed Reporting Expert Explanations
• 7 CATs FREE!
If you earn 100 Forum Points

Engage in the Beat The GMAT forums to earn
100 points for $49 worth of Veritas practice GMATs FREE VERITAS PRACTICE GMAT EXAMS Earn 10 Points Per Post Earn 10 Points Per Thanks Earn 10 Points Per Upvote ## A newly-opened retail store made$400 profit on the initial

tagged by: swerve

## A newly-opened retail store made $400 profit on the initial ## Timer 00:00 ## Your Answer A B C D E ## Global Stats Difficult A newly-opened retail store made$400 profit on the initial expenditure of $25000, and then made$1200 profit on the next $80000 expenditure. By approximately what percent did the ratio of profit to expenditure change from the first$25000 expenditure to the next $80000 expenditure? A. 6.67% decrease B. 6.25% decrease C. 0 D. 6.25% increase E. 6.67% increase The OA is B Source: e-GMAT ### GMAT/MBA Expert Elite Legendary Member Joined 23 Jun 2013 Posted: 10129 messages Followed by: 494 members Upvotes: 2867 GMAT Score: 800 Top Reply Hi All, We're told that a newly-opened retail store made$400 profit on the initial expenditure of $25000, and then made$1200 profit on the next $80000 expenditure. We're asked for the approximate percentage change in the ratio of profit to expenditure change from the first$25000 expenditure to the next $80000 expenditure. This question requires the use of the Percentage Change Formula - and you will likely find it helpful to rewrite the given values as individual percentages (instead of fractions). Percentage Change = (New - Old)/(Old) = Difference/Original The ratio of the original profit-to-expenditure = 400/25000 = 4/250 The ratio of the second profit-to-expenditure = 1200/80000 = 12/800 We can rewrite those fractions as percents... 4/250 = 16/1000 = 1.6% 12/800 = 1.5/100 = 1.5% Thus, there was clearly a decrease (from 1.6% to 1.5%). Using the Percentage Change Formula, we have... (1.6 - 1.5)/(1.6) = 0.1/1.6 = 1/16 = a 6 1/4% decrease. Final Answer: B GMAT assassins aren't born, they're made, Rich _________________ Contact Rich at Rich.C@empowergmat.com ### GMAT/MBA Expert GMAT Instructor Joined 25 Apr 2015 Posted: 2424 messages Followed by: 18 members Upvotes: 43 swerve wrote: A newly-opened retail store made$400 profit on the initial expenditure of $25000, and then made$1200 profit on the next $80000 expenditure. By approximately what percent did the ratio of profit to expenditure change from the first$25000 expenditure to the next $80000 expenditure? A. 6.67% decrease B. 6.25% decrease C. 0 D. 6.25% increase E. 6.67% increase The OA is B Source: e-GMAT The first profit-to-expenditure ratio is: 400/25000 = 4/250 = 2/125 = 16/1000 The second profit-to-expenditure ratio is: 1200/80,000 = 12/800 = 3/200 = 15/1000 Thus, the percent change is: (15/1000 - 16/1000)/(16/1000) x 100 -1/1000 x 1000/16 x 100 = -1/16 x 100 = -6.25 percent The negative coefficient is indicative of a decrease; thus, the change was a 6.25 percent decrease. Answer: B _________________ Scott Woodbury-Stewart Founder and CEO scott@targettestprep.com See why Target Test Prep is rated 5 out of 5 stars on BEAT the GMAT. Read our reviews • Free Veritas GMAT Class Experience Lesson 1 Live Free Available with Beat the GMAT members only code • Free Trial & Practice Exam BEAT THE GMAT EXCLUSIVE Available with Beat the GMAT members only code • Magoosh Study with Magoosh GMAT prep Available with Beat the GMAT members only code • Free Practice Test & Review How would you score if you took the GMAT Available with Beat the GMAT members only code • Get 300+ Practice Questions 25 Video lessons and 6 Webinars for FREE Available with Beat the GMAT members only code • 1 Hour Free BEAT THE GMAT EXCLUSIVE Available with Beat the GMAT members only code • 5 Day FREE Trial Study Smarter, Not Harder Available with Beat the GMAT members only code • Award-winning private GMAT tutoring Register now and save up to$200

Available with Beat the GMAT members only code

• 5-Day Free Trial
5-day free, full-access trial TTP Quant

Available with Beat the GMAT members only code

• FREE GMAT Exam
Know how you'd score today for \$0

Available with Beat the GMAT members only code

### Top First Responders*

1 Jay@ManhattanReview 68 first replies
2 Brent@GMATPrepNow 65 first replies
3 GMATGuruNY 41 first replies
4 Ian Stewart 23 first replies
5 Scott@TargetTestPrep 15 first replies
* Only counts replies to topics started in last 30 days
See More Top Beat The GMAT Members

### Most Active Experts

1 Scott@TargetTestPrep

Target Test Prep

200 posts
2 Brent@GMATPrepNow

GMAT Prep Now Teacher

91 posts
3 Max@Math Revolution

Math Revolution

85 posts
4 Jay@ManhattanReview

Manhattan Review

73 posts
5 GMATGuruNY

The Princeton Review Teacher

65 posts
See More Top Beat The GMAT Experts