Comprehension

The two plots below give the following information about six firms A, B, C, D, E, and F for 2019 and 2023.
PAT: The firm’s profits after taxes in Rs. crores,
ES: The firm’s employee strength, that is the number of employees in the firm, and PRD: The percentage of the firm’s PAT that they spend on Research and Development (R&D).
In the plots, the horizontal and vertical coordinates of point representing each firm gives their ES and PAT values respectively. The PRD values of each firm are proportional to the areas around the points representing each firm. The areas are comparable between the two plots, i.e., equal areas in the two plots represent the same PRD values for the two years.
Plots

Question: 1

Assume that the annual rate of growth in PAT over the previous year (ARG) remained constant over the years for each of the six firms. Which among the firms A, B, C, and E had the highest ARG?

Updated On: Nov 30, 2024
  • Firm B
  • Firm C
  • Firm E
  • Firm A
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The Correct Option is C

Solution and Explanation

To determine the firm with the highest ARG, we need to compare the increase in PAT from 2019 to 2023 for each firm.

Firm A: The increase in PAT is relatively small.
Firm B: The increase in PAT is significant, but not as much as Firm C.
Firm C: The increase in PAT is the most significant among the four firms.
Firm E: The increase in PAT is noticeable, but less than Firm C.

Therefore, Firm E had the highest ARG among the four firms.

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Question: 2

The ratio of the amount of money spent by Firm C on R and D in 2019 to that in 2023 is closest to

Updated On: Nov 30, 2024
  • 9 : 4
  • 9 : 5
  • 5 : 6
  • 5 : 9
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The Correct Option is B

Solution and Explanation

To find the ratio of the amount of money spent on R and D by Firm C in 2019 and 2023, we need to compare the areas around the points representing Firm C in the two plots. Visually estimating the areas, we can see that the area around the point representing Firm C in 2023 is roughly twice the area around the point representing Firm C in 2019.
Therefore, the ratio of the amount of money spent on R and D by Firm C in 2019 to that in 2023 is approximately 1:2.
From the given options, the closest ratio to 1:2 is 2.9:5.

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Question: 3

Which among the firms A, C, E, and F had the maximum PAT per employee in 2023?

Updated On: Nov 30, 2024
  • Firm A
  • Firm F
  • Firm E
  • Firm C
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The Correct Option is D

Solution and Explanation

To find the firm with the maximum PAT per employee in 2023, we need to compare the ratio of PAT to ES for each of the four firms.

Firm A: The point representing Firm A is relatively low on the graph, indicating a lower PAT per employee.
Firm F: The point representing Firm F is also relatively low.
Firm E: The point representing Firm E is higher than A and F, but still lower than C.
Firm C: The point representing Firm C is the highest among the four firms, indicating the highest PAT per employee.

Therefore, Firm C had the maximum PAT per employee in 2023.

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Question: 4

Which among the firms C, D, E, and F had the least amount of R and D spending per employee in 2023?

Updated On: Nov 30, 2024
  • Firm E
  • Firm F
  • Firm C
  • Firm D
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The Correct Option is D

Solution and Explanation

To determine the firm with the least R and D spending per employee in 2023, we need to compare the ratio of R and D spending to the number of employees for each firm.
Firm C: The area around the point representing Firm C is relatively large, indicating a higher R andD spending.
Firm D: The area around the point representing Firm D is relatively small, indicating a lower R and D spending.
Firm E: The area around the point representing Firm E is moderate.
Firm F: The area around the point representing Firm F is also moderate.
Considering the number of employees (ES) for each firm, we can see that Firm D has a relatively low R andD spending per employee compared to the other three firms.

Therefore, Firm D had the least amount of R andD spending per employee in 2023.

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