Comprehension

The following graph shows the percentage of profit of two Companies C and D over the period of four years.
Study the graph and answer the questions that follow.

Question: 1

If the incomes of both the Companies in the year 2018 are the same, then what is the ratio of their expenditures?

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If profits are based on expenditure, reverse the formula: \( E = \frac{I}{1 + P%} \).

Updated On: Apr 24, 2025

7 : 6
11 : 10
10 : 11
13 : 10

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The Correct Option is B

Solution and Explanation

Let income of both companies in 2018 be \( x \). From data: Let Company A's profit percentage = 10%, so \[ x = E_A + 0.1E_A = 1.1E_A \Rightarrow E_A = \frac{x}{1.1} \] Let Company B's profit percentage = 20%, so \[ x = E_B + 0.2E_B = 1.2E_B \Rightarrow E_B = \frac{x}{1.2} \] Now take ratio: \[ \frac{E_A}{E_B} = \frac{\frac{x}{1.1}}{\frac{x}{1.2}} = \frac{1.2}{1.1} = \frac{12}{11} \Rightarrow \frac{11}{10} \]

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Question: 2

If the amount of expenditure remains the same over the years for Company D, in which of the following years, the amount of profit (income – expenditure) will be minimum for Company D?

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When expenditure is fixed, profit depends directly on income. Lower income means lower profit.

Updated On: Apr 24, 2025

2016
2017
2018
2019

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The Correct Option is D

Solution and Explanation

If expenditure is constant, then lesser the income, lesser the profit. Check income trend for Company D over the years: \[ \text{2016} \rightarrow 260 \quad \text{2017} \rightarrow 240 \quad \text{2018} \rightarrow 220 \quad \text{2019} \rightarrow 200 \quad \] Hence, the income is minimum in 2019, so profit is also minimum.

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