Amrit wants to sell cars at 25% above the cost price. Due to a slump in the market, his cost reduces by…
The correct choice is: unchanged. Take the cost price as Rs 100 per car and sales as 100 cars. Before: selling price = Rs 125, profit = Rs 25 per car, total profit = Rs…
Choose your answer
Amrit wants to sell cars at 25% above the cost price. Due to a slump in the market, his cost reduces by 5%. He thus offers a discount of 8% on his original selling price, due to which the sales go up by 25%. Compute the change in Amrit's profit.
Answer and explanation
Correct answer A
The correct choice is: unchanged. Take the cost price as Rs 100 per car and sales as 100 cars. Before: selling price = Rs 125, profit = Rs 25 per car, total profit = Rs 2,500.
After: cost = Rs 95 (5% lower); selling price = 125 × 0.92 = Rs 115 (8% discount on the original Rs 125); profit = Rs 20 per car; sales = 125 cars (25% more). Total profit = 20 × 125 = Rs 2,500.
The total profit is the same, so there is no change; 5%, 4% and 3% are all wrong.
Practice for these exams
-
AILET UG