At a certain company, operating expenses are measured as the sum of payroll expenses and infrastructure spending. During the last fiscal year, payroll expenses increased by 5 percent and infrastructure spending increased by 1 percent. If overall operating expenses increased by 2 percent during the fiscal year, then payroll expenses represented what percent of operating expenses at the beginning of the fiscal year?
A. 20%
B. 25%
C. 33%
D. 40%
E. 50%
OA B
Source: Veritas Prep
5-Day Free Trial
5-day free, full-access trial TTP
Available with Beat the GMAT members only code
MORE DETAILS
At a certain company, operating expenses are measured as the sum of payroll expenses and infrastructure spending. During
This topic has expert replies
-
BTGmoderatorDC
- Moderator
- Posts: 7187
- Joined: Thu Sep 07, 2017 4:43 pm
- Followed by:23 members
Timer
00:00
Your Answer
A
B
C
D
E
Global Stats
GMAT/MBA Expert
-
Scott@TargetTestPrep
- GMAT Instructor
- Posts: 7560
- Joined: Sat Apr 25, 2015 10:56 am
- Location: Los Angeles, CA
- Thanked: 43 times
- Followed by:29 members
Solution:BTGmoderatorDC wrote: ↑Tue Jan 31, 2023 12:54 amAt a certain company, operating expenses are measured as the sum of payroll expenses and infrastructure spending. During the last fiscal year, payroll expenses increased by 5 percent and infrastructure spending increased by 1 percent. If overall operating expenses increased by 2 percent during the fiscal year, then payroll expenses represented what percent of operating expenses at the beginning of the fiscal year?
A. 20%
B. 25%
C. 33%
D. 40%
E. 50%
OA B
Source: Veritas Prep
We can let the payroll expenses at the beginning of the year = p and the infrastructure spending at the beginning of the year = f.
We are given that payroll expenses increased by 5% and infrastructure spending increased 1%, causing an overall increase of 2%. Thus:
1.05p + 1.01f = 1.02(p + f)
105p + 101f = 102p + 102f
3p = f
Since operating expenses are represented by p + f, we have:
p/(p + f) = p/(p + 3p) = p/4p = 1/4 = 25%
Answer: B
Scott Woodbury-Stewart
Founder and CEO
[email protected]
See why Target Test Prep is rated 5 out of 5 stars on BEAT the GMAT. Read our reviews
