In 2008, the profits of Company N were 10 percent...

Hi LUANDATO,

We're told that in 2008, the profits of Company N were 10 percent of revenues and in 2009, the revenues of Company N fell by 20 percent, but profits were 15 percent of revenues. We're asked for the profits in 2009 as a percent of the profits in 2008. The approach that you used (TESTing VALUES) is PERFECT for this question. You could also approach this question Algebraically:

Revenue in 2008 = R
Profits in 2008 = (.1)(R) = .1R

Revenue in 2009 = R - (.2)(R) = (.8)R
Profits in 2009 = (.15)(.8R) = .12R

Profits in 2009 relative to Profits in 2008 = .12R/.1R = 12R/10R = 12/10 = 120%

Final Answer: C

GMAT assassins aren't born, they're made,
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BTGmoderatorLU wrote:In 2008, the profits of Company N were 10 percent of revenues. In 2009, the revenues of Company N fell by 20 percent, but profits were 15 percent of revenues. The profits in 2009 were what percent of the profits in 2008?

A. 80%
B. 105%
C. 120%
D. 124.2%
E. 138%

We can let the revenues in 1998 = 100. Thus, the profits in 1998 = 100 x 0.1 = 10, the revenues in 1999 = 100 x 0.8 = 80, and the profits in 1999 = 80 x 0.15 = 12. Therefore, the profits in 1999 were 12/10 x 100 = 120 percent of the profits in 1998.

Answer: C