Multiple choice

Passage

Directions: Study the given information and answer the following question. The following table gives the discount offered by 5 different hardware stores on various items. Shop/Item Nuts Bolts Washers Screws Shop A - - 10% 10% Shop B - - 5% - Shop C 10% - - - Shop D - 5% - 10% Shop E - - - -

If shop A makes a profit of 20% on selling screws, and if the marked price of the screws at shop D is the same as that at shop A, but shop D manages to source the screws at a price 5% lower than what shop A manages to, then what is the approximate difference in profit percentages that shop A and shop D make in selling the screws?

  1. 5%

  2. 6%

  3. 7%

  4. 8%

  5. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Shop A profit = 20%. Let MP = 100. Shop A discount = 10%, so SP = 90. CP = SP / 1.2 = 75. Shop D MP = 100. Shop D discount = 10%, so SP = 90. Shop D CP = 75 * 0.95 = 71.25. Shop D profit = (90 - 71.25) / 71.25 = 18.75 / 71.25 = 26.3%. Difference = 26.3 - 20 = 6.3%, which is approximately 6%.

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