The following table shows the Income (in ₹ lakh) and percentage (%) profit of…
2023
The following table shows the Income (in ₹ lakh) and percentage (%) profit of a company over the six years from 2017 to 2022. Based on the data in the table:
Year-wise Income and Profit of a Company
Year | Income (in ₹ lakh) | Profit (%) |
|---|---|---|
2017 | 120 | 7.5 |
2018 | 160 | 15 |
2019 | 130 | 22.5 |
2020 | 170 | 17.5 |
2021 | 190 | 20 |
2022 | 150 | 27.5 |
If the profit percentage in 2021 had been 25% instead of 20%, what would the expenditure have been in that year?
Answer: D. ₹ 152 lakh — ConceptWhen profit percentage is calculated on expenditure, income equals expenditure plus profit. Therefore, if the profit rate is r%, Income = Expenditure ×…
- A.
₹ 130 lakh
- B.
₹ 148 lakh
- C.
₹ 120 lakh
- D.
₹ 152 lakh
Show answer & explanation
Correct answer: D
Concept
When profit percentage is calculated on expenditure, income equals expenditure plus profit.
Therefore, if the profit rate is r%, Income = Expenditure × (1 + r/100), so Expenditure = Income ÷ (1 + r/100).
Application
For 2021, the table gives the income as ₹190 lakh.
Use the revised profit rate: 25% = 25/100 = 0.25.
Substitute in the income relation: 190 = Expenditure × (1 + 0.25) = Expenditure × 1.25.
Divide both sides by 1.25: Expenditure = 190 ÷ 1.25 = ₹152 lakh.
Cross-check
At an expenditure of ₹152 lakh, profit is ₹190 lakh − ₹152 lakh = ₹38 lakh, and (38/152) × 100 = 25%. This reproduces the revised profit rate.
Hence, the expenditure would have been ₹152 lakh.