PrepLattice is an independent test-preparation service and is not affiliated with or endorsed by GMAC, the organization that administers the GMAT. GMAT and GMAT Focus are trademarks of GMAC, used here only to name the exam this question is designed to prepare you for.
A hardware supplier buys a power drill for $80 and prices it to earn a profit equal to 25% of its cost. At what price does the supplier sell the drill?
Five fresh questions every day, your progress tracked, every miss explained. Free with an account.
Correct answer
C
Profit is 25% of cost = 0.25 × $80 = $20, so selling price = $80 + $20 = $100, equivalently $80 × 1.25 = $100.
(A) stops at the $20 profit; (B) divides instead of multiplies; (D) adds a flat 25; (E) inflates the markup to 75%.
Pick the theme that suits how you work. You can change it anytime.