Harry and the desk

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yregister: Newbie | Next Rank: 10 Posts; Posts: 5; Joined: Wed Oct 28, 2009 1:07 am

by yregister » Thu Oct 29, 2009 10:30 pm

Source:198 Level 700+ questions from GMAT Prep

69) Harry bought a desk for $150. Selling price was purchase price plus markup that was 40% of selling price. What is gross profit?
a. 40
b. 60
c. 80
d. 90
e. 100

OA:E

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Source: Beat The GMAT — Data Sufficiency | Thu Oct 29, 2009 10:30 pm

BuckeyeT: Senior | Next Rank: 100 Posts; Posts: 76; Joined: Sat Jan 24, 2009 3:00 pm; Thanked: 11 times; GMAT Score:730

by BuckeyeT » Fri Oct 30, 2009 6:21 am

This question should be in the Problem Solving section.

Beyond that, the question is unclear at best. Is Harry the reseller? Or, is Harry the final purchaser?

The formula to use is very clear:
S = P + .4S
or, .6S = P

However, S or P could be $150 depending on how we read the question. I assumed, wrongly, that the 'tense' determined the value.

Harry "bought" AND Selling price "was" indicate that Harry bought the desk as the selling price because both happened in the past(basically, he is NOT the reseller because the selling price would be spoken about in the present or future).

So, (.6)$150 = P
P = 90, Gross Profit 150-90 = 60 or B.

But, your official answer of 100 or E. means that Harry is in fact the reseller (which is entirely unclear from the question).
.6S = $150
S = $250
$250 - $150 = $100 Gross Profit

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Gmatter2.0: Junior | Next Rank: 30 Posts; Posts: 29; Joined: Fri Oct 30, 2009 10:45 pm; Thanked: 1 times; GMAT Score:580

by Gmatter2.0 » Sat Oct 31, 2009 10:30 pm

60 or B is the correct Choice..

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taposh_dr: Senior | Next Rank: 100 Posts; Posts: 32; Joined: Tue Dec 09, 2008 1:37 am; Location: San Francisco; Thanked: 7 times

by taposh_dr » Wed Mar 03, 2010 12:21 pm

Heres how I did it -

PP = 150$
SP= PP + Markup
SP= 150 + (40/100)[sp]
SP=150+0.4SP
0.6SP = 150

SP = 150/0.6 = 250

So, Gross profit =SP - PP = 250-150 =100 $

So, E is correct.

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taposh_dr: Senior | Next Rank: 100 Posts; Posts: 32; Joined: Tue Dec 09, 2008 1:37 am; Location: San Francisco; Thanked: 7 times

by taposh_dr » Wed Mar 03, 2010 12:22 pm

Issue with Clarity -

In number of questions on the practice GMAT prep the questions are not clear.
I am facing the same problem, donot know if that will be the case in actual exam.

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sarthak: Senior | Next Rank: 100 Posts; Posts: 75; Joined: Tue Jan 19, 2010 10:43 am

by sarthak » Sun Mar 07, 2010 7:44 am

what does markup means iin the above question ? That makes the whole question unclear. Can we get such types of words in an actual Gmat question ?

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