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In 1982 a certain company had losses of $10,000 per month.
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06 Feb 2020, 22:15
06 Feb 2020, 22:15
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75% (01:50) correct
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In 1982 a certain company had losses of $10,000 per month. In the first three months of 1983, this company had gains of $4,000 per month. On the average, what would the company need to gain per month in the remainder of 1983 in order to break even over this two-year period?
(A) $9,000 (B) $10,800 (C) $12,000 (D) $13,500 (E) $18,000
(A) $9,000 (B) $10,800 (C) $12,000 (D) $13,500 (E) $18,000
Re: In 1982 a certain company had losses of $10,000 per month.
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09 Feb 2020, 05:16
09 Feb 2020, 05:16
Asif123 wrote:
In 1982 a certain company had losses of $10,000 per month. In the first three months of 1983, this company had gains of $4,000 per month. On the average, what would the company need to gain per month in the remainder of 1983 in order to break even over this two-year period?
(A) $9,000 (B) $10,800 (C) $12,000 (D) $13,500 (E) $18,000
(A) $9,000 (B) $10,800 (C) $12,000 (D) $13,500 (E) $18,000
To make the calulation easy,
just divide 10,000 and 4000 by 1000
So, company loses per month in the year 1982 = $\(10\)
Total loss in the year 1982 = \(10 * 12\) = $\(120\)
In 1983,
for first 3 months, the company gain per month = $4
Total gain for first 3 months in the year 1983 = \(4 * 3\) = $\(12\)
Therefore, the company need to gain in total of the remainder of 1983 in order to break even over this two-year period = $ \(120 \)- $ \(12\) = $ \(108 \)
now multiply $\(108\) with \(1000\) = $ \(108000\) ( since we divided by 1000 in the beginning )
Gain per month for the remaining 9 months = \(\frac{108000}{9} = 12000\)
***Plz mention the source
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Re: In 1982 a certain company had losses of $10,000 per month.
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09 Feb 2020, 07:16
09 Feb 2020, 07:16
Asif123 wrote:
In 1982 a certain company had losses of $10,000 per month. In the first three months of 1983, this company had gains of $4,000 per month. On the average, what would the company need to gain per month in the remainder of 1983 in order to break even over this two-year period?
(A) $9,000 (B) $10,800 (C) $12,000 (D) $13,500 (E) $18,000
(A) $9,000 (B) $10,800 (C) $12,000 (D) $13,500 (E) $18,000
Overall average profit in the 24 months = 0 (since the company breaks even) => Sum of profits = 0 * 12 = 0
Average loss in the first 12 months = $10000 => Loss = - 10000 * 12
Average profit in the next 3 months = $4000 => Profit = + 4000 * 3
We need to determine the average profit in the next 9 months
For the sum to be ZERO, we must have profit of (12 * 10000 - 3 * 4000) = $108000 in the last 9 months
=> Average profit in the last 9 months = $108000/9 = $12000
Answer C
Alternative approach:
We have the following information:
\(\[
\begin{matrix}
# months & Average profit/loss \\
12 & -$10000 \\
3 & $4000\\
9 & $x
\end{matrix}
\]\)
Take ratio of the months (frequencies) for ease of calculation:
\(\[
\begin{matrix}
# months & Average profit/loss \\
4 & -$10000 \\
1 & $4000\\
3 & $x
\end{matrix}
\]\)
Since the company breaks even, the total profit/loss after 24 months is ZERO, and hence, the average is ZERO. Thus, we have:
[4 * (-10000) + 1 * 4000 + 3x]/[4 + 1 + 3] = 0
=> x = $12000
Answer C
