The table shows the income (rupees lakh) and percentage profit of a company from 2017 to 2022.
| Year | Income | Profit (%) |
|---|---|---|
| 2017 | 120 | 7.5 |
| 2018 | 160 | 15 |
| 2019 | 130 | 22.5 |
| 2020 | 170 | 17.5 |
| 2021 | 190 | 20 |
| 2022 | 150 | 27.5 |
Approximately what was the expenditure in 2018?
A120 lakh
B160 lakh
C140 lakh ✓ Correct
D180 lakh
Correct answer: (C) 140 lakh
Explanation
The expenditure in 2018 is about 140 lakh, so the answer is 140 lakh.
Income in 2018 is 160 lakh and the profit is 15%.
Income equals expenditure times one plus the profit rate.
So 160 equals expenditure times 1.15.
Expenditure is therefore 160 divided by 1.15.
This is about 139.1 lakh, which rounds to 140 lakh.
Since profit is charged on cost, expenditure is found by dividing income by 1.15, not by taking 15% of income.
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