• NEW! FREE Beat The GMAT Quizzes
    NEW! FREE Beat The GMAT Quizzes
    NEW! FREE Beat The GMAT Quizzes
    Hundreds of Questions Highly Detailed Reporting Expert Explanations TAKE A FREE GMAT QUIZ
  • 7 CATs FREE!
    If you earn 100 Forum Points

    Engage in the Beat The GMAT forums to earn
    100 points for $49 worth of Veritas practice GMATs FREE

    Veritas Prep
    VERITAS PRACTICE GMAT EXAMS
    Earn 10 Points Per Post
    Earn 10 Points Per Thanks
    Earn 10 Points Per Upvote
    REDEEM NOW

The following tables show the revenues and costs, in

This topic has 1 expert reply and 0 member replies

The following tables show the revenues and costs, in

Post

Timer

00:00

Your Answer

A

B

C

D

E

Global Stats

Difficult



Magoosh

The following tables show the revenues and costs, in thousands of dollars, for a small company in the year 2007



Profit = Revenue - Costs. If costs remain constant from 2007 to 2008, and if revenues increase by 10% in that same period, by what percent will profits increase from 2007 to 2008?

A. 11.6%
B. 25.8%
C. 34.7%
D. 71.2%
E. 116.3%

OA C

  • +1 Upvote Post
  • Quote
  • Flag

GMAT/MBA Expert

Post
Hi All,

We're told that Profit = Revenue - Costs and that costs will remain constant from 2007 to 2008, while revenues INCREASE by 10% in that same period. We're asked for the percent increase in PROFITS from 2007 to 2008. This question comes down to some Arithmetic and the Percentage Change Formula. In addition, since the answer choices are sufficiently 'spread out', we can use estimation to save some calculation time...

Profit in 2007 = (Revenue in 2007) - (Costs in 2007) = 1052 - 749 = an estimate of 1050 - 750 = 300

We're told that, in 2008, Revenue will INCREASE by 10% while Costs will stay the same...

Profit in 2008 = (Revenue in 2008) - (Costs in 2008) =
(1.1)(1050) - 750 =
1155 - 750 =
405

Percentage Change = (New - Old)/(Old) = (Difference)/(Original) = (405 - 300)/(300) = 105/300 = a little more than 1/3 = a little more than 33%

Final Answer: C

GMAT assassins aren't born, they're made,
Rich

_________________
Contact Rich at Rich.C@empowergmat.com

  • +1 Upvote Post
  • Quote
  • Flag
  • Kaplan Test Prep
    Free Practice Test & Review
    How would you score if you took the GMAT

    Available with Beat the GMAT members only code

    MORE DETAILS
    Kaplan Test Prep
  • Magoosh
    Magoosh
    Study with Magoosh GMAT prep

    Available with Beat the GMAT members only code

    MORE DETAILS
    Magoosh
  • e-gmat Exclusive Offer
    Get 300+ Practice Questions
    25 Video lessons and 6 Webinars for FREE

    Available with Beat the GMAT members only code

    MORE DETAILS
    e-gmat Exclusive Offer
  • The Princeton Review
    FREE GMAT Exam
    Know how you'd score today for $0

    Available with Beat the GMAT members only code

    MORE DETAILS
    The Princeton Review
  • Varsity Tutors
    Award-winning private GMAT tutoring
    Register now and save up to $200

    Available with Beat the GMAT members only code

    MORE DETAILS
    Varsity Tutors
  • PrepScholar GMAT
    5 Day FREE Trial
    Study Smarter, Not Harder

    Available with Beat the GMAT members only code

    MORE DETAILS
    PrepScholar GMAT
  • Target Test Prep
    5-Day Free Trial
    5-day free, full-access trial TTP Quant

    Available with Beat the GMAT members only code

    MORE DETAILS
    Target Test Prep
  • Veritas Prep
    Free Veritas GMAT Class
    Experience Lesson 1 Live Free

    Available with Beat the GMAT members only code

    MORE DETAILS
    Veritas Prep
  • Economist Test Prep
    Free Trial & Practice Exam
    BEAT THE GMAT EXCLUSIVE

    Available with Beat the GMAT members only code

    MORE DETAILS
    Economist Test Prep
  • EMPOWERgmat Slider
    1 Hour Free
    BEAT THE GMAT EXCLUSIVE

    Available with Beat the GMAT members only code

    MORE DETAILS
    EMPOWERgmat Slider

Top First Responders*

1 Jay@ManhattanReview 66 first replies
2 fskilnik@GMATH 50 first replies
3 Brent@GMATPrepNow 49 first replies
4 GMATGuruNY 32 first replies
5 Rich.C@EMPOWERgma... 26 first replies
* Only counts replies to topics started in last 30 days
See More Top Beat The GMAT Members

Most Active Experts

1 image description fskilnik@GMATH

GMATH Teacher

109 posts
2 image description Brent@GMATPrepNow

GMAT Prep Now Teacher

97 posts
3 image description Max@Math Revolution

Math Revolution

94 posts
4 image description Jay@ManhattanReview

Manhattan Review

83 posts
5 image description GMATGuruNY

The Princeton Review Teacher

78 posts
See More Top Beat The GMAT Experts