GMAT PREP question w/ OA

[Stockmoose16]

What is the best way to solve the following problem? I tried picking numbers, but the first few numbers I picked didn't give me the correct answer. Is there a better way than just randomly testing a series of numbers?


Which of company x and company y earned the greater gross profit last year?

(1) last year the expenses of company x were 5/6 of the expenses of company y
(2) last year the revenues of company x were $6 million less than the rev of company y

OA is E

[cramya]

RX- REVENUE OF X
RY - REVENUE OF Y
EX-EXPENSE OF X
EY-EXPENSE OF Y

To check if RX-EX > RY-EY (Revenue-expenses = profit)

Stmt I)
EX=5/6EY

We dont know the revenue for either X or Y(cant determine the greater profit) so INSUFF

Stmt II

RX=RY-6

We dont know the revenue for either X or Y(cant determine the greater profit) so INSUFF

Taken together INSUFFICIENT since the 1/6 of the expense less for Comp X may or may not compensate for the increase in comp y revenue

[cramya]

RX- REVENUE OF X
RY - REVENUE OF Y
EX-EXPENSE OF X
EY-EXPENSE OF Y

To check if RX-EX > RY-EY (Revenue-expenses = profit)

Stmt I)
EX=5/6EY

We dont know the revenue for either X or Y(cant determine the greater profit) so INSUFF

Stmt II

RX=RY-6

We dont know the expense for either X or Y(cant determine the greater profit) so INSUFF

Taken together INSUFFICIENT since the 1/6 of the expense less for Comp X may or may not compensate for the increase in comp y revenue

[Stockmoose16]

RX- REVENUE OF X
RY - REVENUE OF Y
EX-EXPENSE OF X
EY-EXPENSE OF Y

To check if RX-EX > RY-EY (Revenue-expenses = profit)

Stmt I)
EX=5/6EY

We dont know the revenue for either X or Y(cant determine the greater profit) so INSUFF

Stmt II

RX=RY-6

We dont know the expense for either X or Y(cant determine the greater profit) so INSUFF

Taken together INSUFFICIENT since the 1/6 of the expense less for Comp X may or may not compensate for the increase in comp y revenue

Cramya,

How would you know, with any certainty, that "1/6 of the expense less for Comp X," combined with the first statement, would not give you a definitive answer on which company makes a larger gross profit?

I tried picking numbers, and it took me 4 or 5 tries to prove both statements insufficient, even when put together.

[cramya]

Its given Company x 's expense is 5/6 of Company Y's.

I just used this piece of info and said 1/6 of the expense less for Comp X

Let me know if thsi is not what you are asking

[reacher]

RX- REVENUE OF X
RY - REVENUE OF Y
EX-EXPENSE OF X
EY-EXPENSE OF Y

To check if RX-EX > RY-EY (Revenue-expenses = profit)

Stmt I)
EX=5/6EY

We dont know the revenue for either X or Y(cant determine the greater profit) so INSUFF

Stmt II

RX=RY-6

We dont know the expense for either X or Y(cant determine the greater profit) so INSUFF

Taken together INSUFFICIENT since the 1/6 of the expense less for Comp X may or may not compensate for the increase in comp y revenue

Cramya,

How would you know, with any certainty, that "1/6 of the expense less for Comp X," combined with the first statement, would not give you a definitive answer on which company makes a larger gross profit?

I tried picking numbers, and it took me 4 or 5 tries to prove both statements insufficient, even when put together.

In fact, you didn't have to pick numbers here. Once you find that there is an ambiguity (expenses may be more or expenses might be less), you are getting a "Yes" and "no" answer to the question and thus E.

[lunarpower]

What is the best way to solve the following problem? I tried picking numbers, but the first few numbers I picked didn't give me the correct answer. Is there a better way than just randomly testing a series of numbers?


Which of company x and company y earned the greater gross profit last year?

(1) last year the expenses of company x were 5/6 of the expenses of company y
(2) last year the revenues of company x were $6 million less than the rev of company y

OA is E

hey.

this problem is fundamentally about inequalities, so you shouldn't be "randomly testing numbers". instead, you should be testing EXTREMES: in general, if you want to find out about the extreme possibilities of some quantity (which you do in this case, so that you can find out the limits on gross profit), then you should plug in extremes.

i'll take it as understood that the individual statements are insufficient, as (1) doesn't mention revenue and (2) doesn't mention cost. if you're plugging numbers for those 2 individual statements separately, then you're wasting time; you have to notice the larger picture.

considering the 2 statements together:
let's try EXTREMES.

* let's try ridiculously small expenses: $5 for company x, $6 for company y.
* let's fix company x revenue at $0 and company y revenue at $6m.

in this case, profit x is -$5 (that's negative) and profit y is $5,999,994, so y wins.

* let's try ridiculously huge expenses: $5 billion for company x, $6 billion for company y.
* let's still fix company x revenue at $0 and company y revenue at $6m (it's easier to have one moving target than two).

in this case, profit x is -$5 billion (that's negative) and profit y is -$5,994,000,000 (also negative), so this time x wins.

answer (e).

notice that these extremes are such that you don't actually have to calculate the quantities 5,999,994 and -5,994,000,000; you could just go with "about $6m" and "about -$6b".

in general, though, your takeaway is this humble, obvious-sounding statement: if you want extremes, then plug in extremes.

[Stockmoose16]

What is the best way to solve the following problem? I tried picking numbers, but the first few numbers I picked didn't give me the correct answer. Is there a better way than just randomly testing a series of numbers?


Which of company x and company y earned the greater gross profit last year?

(1) last year the expenses of company x were 5/6 of the expenses of company y
(2) last year the revenues of company x were $6 million less than the rev of company y

OA is E

hey.

this problem is fundamentally about inequalities, so you shouldn't be "randomly testing numbers". instead, you should be testing EXTREMES: in general, if you want to find out about the extreme possibilities of some quantity (which you do in this case, so that you can find out the limits on gross profit), then you should plug in extremes.

i'll take it as understood that the individual statements are insufficient, as (1) doesn't mention revenue and (2) doesn't mention cost. if you're plugging numbers for those 2 individual statements separately, then you're wasting time; you have to notice the larger picture.

considering the 2 statements together:
let's try EXTREMES.

* let's try ridiculously small expenses: $5 for company x, $6 for company y.
* let's fix company x revenue at $0 and company y revenue at $6m.

in this case, profit x is -$5 (that's negative) and profit y is $5,999,994, so y wins.

* let's try ridiculously huge expenses: $5 billion for company x, $6 billion for company y.
* let's still fix company x revenue at $0 and company y revenue at $6m (it's easier to have one moving target than two).

in this case, profit x is -$5 billion (that's negative) and profit y is -$5,994,000,000 (also negative), so this time x wins.

answer (e).

notice that these extremes are such that you don't actually have to calculate the quantities 5,999,994 and -5,994,000,000; you could just go with "about $6m" and "about -$6b".

in general, though, your takeaway is this humble, obvious-sounding statement: if you want extremes, then plug in extremes.

Ron,

How do you know that you don't have to test the values where BOTH revenue and expenses are moving simultaneously. It appears that you always tried to keep one element constant. Would there ever be a case where a problem like this looked insufficient, but only because the person solving the problem forgot to test the values where both revenue and expenses change at the same time?

Also, Ron, would you mind responding to my other post regarding DS:

https://www.beatthegmat.com/number-prope ... 21516.html

[lunarpower]

Ron,

How do you know that you don't have to test the values where BOTH revenue and expenses are moving simultaneously. It appears that you always tried to keep one element constant. Would there ever be a case where a problem like this looked insufficient, but only because the person solving the problem forgot to test the values where both revenue and expenses change at the same time?

as i said in the above post, it's easier to have one moving target than two. therefore, you should try varying the quantities one at a time FIRST. remember, your goal, as usual, is to prove that the statement(s) is/are insufficient.

if manipulating one of the quantities at a time doesn't produce an "insufficient" result, then you should try to manipulate both quantities at once.

this is actually very similar to the protocol for a controlled scientific experiment involving more than one variable: the variables are manipulated one at a time in order to isolate their individual effects.
note that, if you only manipulate all the quantities together, you may miss an "insufficient" result that would be generated by just manipulating one of them by itself.