Manhattan Prep
In 1994, Company X recorded profits that were 10% greater than in 1993, and in 1993 the company's profits were 20% greater than they were in 1992. What were the company's profits in 1992?
1) In 1994, the company's profits were $100,000 greater than in 1993.
2) For every $3.00 in profits earned in 1992, Company X earned $3.96 in 1994.
OA A
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In 1994, Company X recorded profits that were 10% greater
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We already know the ratio of the company's profits in 1994 to profits in 1992, since we're told the percent changes from year to year in the stem, so Statement 2 just restates information we already know, and is useless.
If in 1994 the company profits were $100,000 greater than in 1993, and were also 10% greater than in 1993, then 10% of the 1993 profits is equal to $100,000, and the 1993 profits must have been $1m. From there, we can work backwards using the 20% increase from 1992 to 1993 to find the profits in 1992 (bizarrely, they work out to be $833,333.33 and 1/3 of a cent, which doesn't really make sense). So Statement 1 is sufficient.
If in 1994 the company profits were $100,000 greater than in 1993, and were also 10% greater than in 1993, then 10% of the 1993 profits is equal to $100,000, and the 1993 profits must have been $1m. From there, we can work backwards using the 20% increase from 1992 to 1993 to find the profits in 1992 (bizarrely, they work out to be $833,333.33 and 1/3 of a cent, which doesn't really make sense). So Statement 1 is sufficient.
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