Question

If the ranking is based on Profit Before Tax in descending order, subject to the condition that 'other expenses' of all the industry sectors equals zero, then which of the following statements is wrong?

• A. Rank of Chemical industry does not change
• B. Rank of electricity industry declines
• C. Diversified industry rank changes from 3rd to 4th
• D. Rank of food industry changes from 5th to 6th

Hint:

Eliminating expenses increases profit. When ranking by profit, always adjust before concluding any positional change.

Answer 1

The Correct Option is D

To assess rank change based on Profit Before Tax (PBT), we adjust the PBT values by eliminating 'other expenses' for each sector (i.e., add other expenses back to PBT):
Electricity: \( 3,814 + 2,564 = 6,378 \)
Diversified: \( 11,514 + 24,706 = 36,220 \)
Food: \( 10,206 + 34,271 = 44,477 \) Upon re-ranking based on adjusted PBT, we observe: - Electricity industry’s PBT increases, improving its rank - Diversified also increases - Food industry’s PBT increases substantially to 44,477, likely improving its position, not declining Therefore, the statement that food industry changes from 5th to 6th rank is **incorrect**, as its PBT increases. \[ {\text{(d)}} \]