Question

A person imports cars at the rate INR 8.5 lakh per car and sells them at INR 12 lakh per car. He spends 10% of the selling price on taxes. If he sells 24 such cars, what is his profit (in INR)?

• A. 84 lakh
• B. 55.2 lakhs
• C. 63.6 lakhs
• D. 75.6 lakhs

Hint:

In profit and loss questions involving taxes or commissions, always subtract these expenses from the selling price before calculating profit.

Answer 1

The Correct Option is B

Step 1: Find the effective selling price after tax per car.
Selling price per car = 12 lakhs.
Tax paid = 10% of 12 lakhs = \( 1.2 \) lakhs.
Effective selling price after tax = \( 12 - 1.2 = 10.8 \) lakhs.
Step 2: Find the cost price per car.
Cost price per car = 8.5 lakhs.
Step 3: Calculate the profit per car.
Profit per car = Selling price after tax − Cost price
\[ 10.8 - 8.5 = 2.3 \text{ lakhs} \]
Step 4: Calculate total profit for 24 cars.
\[ \text{Total profit} = 2.3 \times 24 = 55.2 \text{ lakhs} \]
Step 5: Conclusion.
The total profit earned by selling 24 cars is 55.2 lakhs.