Hi All,
We're told that a retailer sells pashminas at a ten percent discount, a pashmina COST him $75 and he wants to make a profit of no less than twenty percent on the COST (after the discount). We're asked for the minimum tag price he needs to put on a pashmina.
To start, this question is awkwardly-worded, but the 'intent' is that the retailer will put a price on a pashmina, but then charge 10% less than THAT price. We're asked for the original (pre-discount) price that is put on the pashmina. This question can be solved in a couple of different ways, including by TESTing THE ANSWERS. Let's start with Answer B first...
Answer B: $100
IF... the tag price = $100, then....
the discounted price = $100 - (.1)($100) = $100 - $10 = $90
the discounted price is $90 - $75 = $15 more than the cost of the pashmina
$15/$75 = 1/5 = 20% of the cost
This is an exact match for what we were told, so this must be the answer.
Final Answer: B
GMAT assassins aren't born, they're made,
Rich
