As per my understanding, following is solution of the question.

Equation of Question is

(Rate/Aver of Acquisition x Qty of opening cars)+ (Rate/Aver of Acquisition x Qty of new cars)= Total Cost of Acquisition

($10,000 x 200) + ( C x 50) = $2,000,000+50C, where C is average rate of new cars acquisition

i) C = $12,500 so SUFFICIENT

ii) Revenue rate and number of cars sold is not provided so INSUFFICIENT

so answer is "A"

The question is asking about the acquisitions left at the end of the year.

so if he own 200 cars of 10,000 each so that's the C.P. of the cars but when he will sell them he will sell at u can say 12,000 or 15,000 whatever so that will be the S.P.

suppose he sells 10 cars worth 12,000. so his revenue is 120000.

His actual acquisition is (200-10)*10,000 = 1900000
but the statement 2 gives us the revenue which in our case is 120000, according to this our acquisitions should be 200*10000 - 120000 =1880000, which is wrong.

Oneva wrote:At the beginning of last year, Tony's Auto dealership had 200 cars available for sale on the lot. The cars were acquired by Tony's at an average cost of $10,000 each. During last year, Tony's acquired an additional 50 cars. What was the total acquisition cost on the lot at Tony's at the end of the year?

1.) The average cost per car of all cars acquired by Tony's last year was $12,500.

2.) The total revenue from cars sold last year was $1,050,000.

The answer is E

But I thought it would be C.

If you take statement 1 you can find the total cost of all the cars. Then with statement 2 you can subtract revenue from the total acquisition cost. That would then leave you with the total acquisition cost at the end of the year. But the answer Veritas gives is E because we still don't know which cars Tony's sold last year and cannot calculate the acquisition cost. But that doesn't make sense to me because the question is asking for the total; and we can find the total acquisition cost. Could someone please clarify?

lets take in Numbers.
Say by 2010 december Tony has 200 cars in his lot which he acquired at cost of 10K per car.
During 2011 he bought an additional 50 cars. Acquisition cost UNKNOWN.
How many cars Sold during 2011 UNKNOWN.

Question Total Acquisition cost of REMAINING cars in Tonys lot as on December 2011.

Now Stmt1 gives the total AVG cost of cars acquired during last year
that will be x/50 = 12500 because he acquired 50cars during last year.
This gives the total cost of 50 cars and we can add the remaining 200 cars to get the total acquisition cost of all the cars remaining in Tony's lot ASSUMING NONE OF THE CAR IS SOLD.
so this dosent say any thing about the number of cars sold. NOT SUFFICIENT

STMT 2 - IT gives total Revenue.Cost of the 50 Cars UNKNOWN.SO NOT SUFFICIENT.

Combining 1 + 2 also we will not be able to find out because we need to know the PRICE for which the cars are sold and the number. if we subtract total ACost and TRevenue we will get totalloss or Profit- MEANS I can sell 10Cars for 1,050,000 or 5cars for 1,050,000 and So I will not be able to tell the acquisition cost unless i know the number of cars remaining and the type(in 200lot or 50lot)
SO NOT C EITHER.

HENCE ANSWER E

This question is very clear as worded and the answer is A ie 50 x 12500---this would be a 100 level question

Introducing other facts changes it and turns it perhaps into the question that the author intended to ask in the first place.

As the question is worded, you can reasonably assume that the begining of the year is Jan 1. The first ambiguity occurs right there---were these 200 cars present on the lot on Dec 31 of the previous year?---not clear---.

It is very clear from the question that 50 cars were acquired that year. The fact that cars were bought and sold is irrelevant and is superseded by this explicit statement. So why would the acquisition cost not be 50 x 12500?

I am puzzled as to where the extra info is coming from. It is neither insinuated nor implied in the question.

IMhmblO -Unless this question is reworded, I see no way that A would not only be the best answer but the only answer.

shingik wrote:This question is very clear as worded and the answer is A ie 50 x 12500---this would be a 100 level question

Introducing other facts changes it and turns it perhaps into the question that the author intended to ask in the first place.

As the question is worded, you can reasonably assume that the begining of the year is Jan 1. The first ambiguity occurs right there---were these 200 cars present on the lot on Dec 31 of the previous year?---not clear---.

It is very clear from the question that 50 cars were acquired that year. The fact that cars were bought and sold is irrelevant and is superseded by this explicit statement. So why would the acquisition cost not be 50 x 12500?

I am puzzled as to where the extra info is coming from. It is neither insinuated nor implied in the question.

IMhmblO -Unless this question is reworded, I see no way that A would not only be the best answer but the only answer.

Define acquisition costs: Does this not mean the cost of acquiring? If acquisition costs mean something else please clarify.

i also think that the answer should be option A because assuming x to be the price of 50 cars we can have this equation 10000*200+50*x=12500*250 so statement one is sufficient

Answer should be A, right?

The equation from the stem goes: 200*100,000 + 50*x = ?
Basically rewording the stem gives us, what is x?

1) From 1, 50*x = $12,500. SUFFICIENT.
2) B is INSUFFICIENT. We have no clue of how many cars were sold? and what is the sale price?

Earlier i also arrived at A

But as other pointed out m A assumes that the number of cars remaining in Lot at end of last year = same = 250 means no cars were sold.
So answer is E

In my opinion (A) should be the answer. Acquisition cost should be cost of purchase for the whole year. If not experts help is required...

The key part of the question is "What was the total acquisition cost on the lot at Tony's at the end of the year? "

In order for a statement to be sufficient, it must give us a way of figuring out how many cars are left on the lot at the end of the year.

The question itself would be a bit more clear if it had said "What was the total acquisition cost of cars on the lot at Tony's at the end of the year? "

Bill

Went through all the previous posts and even I had my answer marked as A. Not sure if the question is not worded correctly but I understood it as mentioned in the few prev posts.

That we had to find the total cost of purchase (acquisition) for the cars.

I too got A considering $12,500 as the cost price for Tony !

I could see why the answer would be E if the question mentioned that cars would be sold. But my initial answer was A. I don't think a question with assumptions like this would show up in the DS part of GMAT...

C the nswer

Hi,

i saw everyone debating on "acquisition cost". Is acquisition cost not different from retention/inventory cost?

in that case the acquisition cost can be derived by statement 1 so that answer should be A

tx