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by yalanand » Sat Jan 31, 2009 1:19 am
Peter opened his restaurant on Jan 1, 2007 but was unsatisfied with one year's profits. Starting Jan 1, 2008 Peter made changes to become more profitable. On Dec 31, 2008, by what percent were the 2008 profits greater than the 2007 profits?

(1) In 2008, his total revenues were twice his total costs.
(2) From 2007 to 2008, Peter increased his revenues by 25%, and decreased his costs by 10%.
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Source: — Data Sufficiency |
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by DanaJ » Sat Jan 31, 2009 3:23 am
1. is insufficient because we do not know anything about the profits for 2007.
2. profit = revenues - costs. For the year 2007 you have that:
p = r - c.
For 2008 you have that:
p1 = 1.25r - 0.9c = r - c + 0.25r + 0.1c = p + 0.1p + 0.15r. Since we do not have a relationship between r and p, then we cannot solve the problem.

My guess would be E. What is the OA?
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by yalanand » Sat Jan 31, 2009 3:47 am
No its not E...
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by DanaJ » Sat Jan 31, 2009 3:59 am
Yes, you are right... It's C. Taken together, the two stmts are sufficient, since you get that 1.25r = 2*0.9c. Silly me...
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by yalanand » Sat Jan 31, 2009 4:02 am
:)
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