Stockmoose16 wrote:What is the best way to solve the following problem? I tried picking numbers, but the first few numbers I picked didn't give me the correct answer. Is there a better way than just randomly testing a series of numbers?
Which of company x and company y earned the greater gross profit last year?
(1) last year the expenses of company x were 5/6 of the expenses of company y
(2) last year the revenues of company x were $6 million less than the rev of company y
OA is E
hey.
this problem is fundamentally about
inequalities, so you shouldn't be "randomly testing numbers". instead, you should be testing EXTREMES: in general, if you want to find out about the extreme possibilities of some quantity (which you do in this case, so that you can find out the limits on gross profit), then you should plug in extremes.
i'll take it as understood that the individual statements are insufficient, as (1) doesn't mention revenue and (2) doesn't mention cost. if you're plugging numbers for those 2 individual statements separately, then you're wasting time; you have to notice the larger picture.
considering the 2 statements together:
let's try EXTREMES.
* let's try ridiculously small expenses: $5 for company x, $6 for company y.
* let's fix company x revenue at $0 and company y revenue at $6m.
in this case, profit x is -$5 (that's negative) and profit y is $5,999,994, so y wins.
* let's try ridiculously huge expenses: $5 billion for company x, $6 billion for company y.
* let's still fix company x revenue at $0 and company y revenue at $6m (it's easier to have one moving target than two).
in this case, profit x is -$5 billion (that's negative) and profit y is -$5,994,000,000 (also negative), so this time x wins.
answer (e).
notice that these extremes are such that you don't actually have to calculate the quantities 5,999,994 and -5,994,000,000; you could just go with "about $6m" and "about -$6b".
in general, though, your takeaway is this humble, obvious-sounding statement:
if you want extremes, then plug in extremes.
