In 1982 and 1983, Company B's operating expenses were $12.0

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swerve: Legendary Member; Posts: 2535; Joined: Sun Oct 29, 2017 2:04 pmFollowed by: 6 members

by swerve » Tue Jan 08, 2019 8:24 am

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In 1982 and 1983, Company B's operating expenses were $12.0 million and $14.0 million, respectively, and its revenues were $15.6 million and $18.8 million, respectively. What was the percent increase in Company B's profit (revenues minus operating expenses) from 1982 to 1983?

A. 3%
B. 16 2/3%
C. 25%
D. 33 1/3%
E. 60%

The OA is D

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by Brent@GMATPrepNow » Tue Jan 08, 2019 8:35 am

swerve wrote:In 1982 and 1983, Company B's operating expenses were $12.0 million and $14.0 million, respectively, and its revenues were $15.6 million and $18.8 million, respectively. What was the percent increase in Company B's profit (revenues minus operating expenses) from 1982 to 1983?

A. 3%
B. 16 2/3%
C. 25%
D. 33 1/3%
E. 60%

The profit in 1982 = 15.6 - 12.0 = $3.6 million
The profit in 1983 = 18.8 - 14.0 = $4.8 million

Percent change = (100)(new - old)/old
= (100)(4.8 - 3.6)/3.6
= (100)(1.2)/(3.6)
= (100)(1/3)
= 33 1/3%

Answer: D

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Brent

Brent Hanneson - Creator of GMATPrepNow.com

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Scott@TargetTestPrep: GMAT Instructor; Posts: 8134; Joined: Sat Apr 25, 2015 10:56 amFollowed by: 29 members; Location: Los Angeles, CA; Thanked: 43 times

by Scott@TargetTestPrep » Mon Jan 21, 2019 6:02 pm

swerve wrote:In 1982 and 1983, Company B's operating expenses were $12.0 million and $14.0 million, respectively, and its revenues were $15.6 million and $18.8 million, respectively. What was the percent increase in Company B's profit (revenues minus operating expenses) from 1982 to 1983?

A. 3%
B. 16 2/3%
C. 25%
D. 33 1/3%
E. 60%

The profit in 1982 was 15.6 - 12.0 = 3.6 million dollars, and, in 1983, the profit was 18.8 - 14.0 = 4.8 million dollars.

We use the formula for percent increase: (new - old)/old x 100. The percent increase in profit from 1982 to 1983 was:

(4.8 - 3.6)/3.6 x 100

1.2/3.6 x 100

12/36 x 100 = 1/3 x 100 = 33 1/3%

Answer: D

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