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Revenue vs. gross revenue

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by joannabanana » Sat Oct 02, 2010 3:36 am
What is the difference between revenue and gross revenue? e.g.:

Carlos & Co. generated revenue of $1,250 in 2006. This was 12.5% of its gross revenue. In 2007, the
gross revenue grew by $2,500. What is the percentage increase in the revenue in 2007?
(A) 12.5%
(B) 20%
(C) 25%
(D) 50%
(E) 66.3%
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by frank1 » Sat Oct 02, 2010 3:55 am
What is source of this question
is it
What is the percentage increase in the revenue in 2007
or
What is the percentage increase in the gross revenue in 2007
In 2007 what is difference between Gross revenue and revenue?
is it still 12.5% of gross revenue.

If it is increase in the gross revenue in 2007 ...it would be very easy question....

so can you confirm on it...

thanks
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by joannabanana » Sat Oct 02, 2010 4:58 am
I got this question from Nova GMAT Math Bible (I know, it's not worded very well!)

The answer they give is this:

We are given that Carlos & Co. generated revenue of $1,250 in 2006 and that this was 12.5% of the gross revenue. Hence, if 1250 is 12.5% of the revenue, then 100% (gross revenue) is (100/12.5)(1250) = 10,000. Hence, the total revenue by end of 2007 is $10,000. In 2006, revenue grew by $2500. This is a growth of (2500/10000) x 100 = 25%. The answer is (C).


I'm hoping someone can give me an official definition for what revenue and gross revenue are.
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by goyalsau » Sat Oct 02, 2010 5:08 am
joannabanana wrote:What is the difference between revenue and gross revenue? e.g.:

Carlos & Co. generated revenue of $1,250 in 2006. This was 12.5% of its gross revenue. In 2007, the
gross revenue grew by $2,500. What is the percentage increase in the revenue in 2007?
(A) 12.5%
(B) 20%
(C) 25%
(D) 50%
(E) 66.3%
Is it C,
please confirm??
Saurabh Goyal
[email protected]
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by joannabanana » Sat Oct 02, 2010 8:13 am
Yes, see above.
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by frank1 » Sat Oct 02, 2010 8:32 am
As said earlier i think in that case
it should be percent change in Gross revenue...not revenue if you consider those two are different...
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by Ian Stewart » Sun Oct 03, 2010 10:32 am
joannabanana wrote: I'm hoping someone can give me an official definition for what revenue and gross revenue are.
They are the same thing, so the question you posted is nonsense. I'm sure the question designer meant to distinguish between revenue and profit, and that's a distinction you might see on the GMAT, but you'll never see a GMAT question which talks about both 'revenue' and 'gross revenue'.
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by joannabanana » Sun Oct 03, 2010 11:54 am
Ok thank you! I was hoping the answer was something like that. It seemed a bit too confusing and vague to be a real GMAT concept. I'll stop worrying about this one now.
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