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HURDLE-03 : PROFIT AND LOSS

(Solve this Hurdle by 1st Feb.)

In every exam there is at least one questions on profit and loss, stating that the cost was first increased/decreased by X % and then increased/decreased by Y %. How nice it would be if there was an easy way to calculate the final change in % of the cost with just one formula. It would really help you in saving time and improving UR Percentile. Here is the formula for the same :

Suppose the price is first increase/decreased by X% and then increased/ decreased by Y% , the final change % in the price is given by the following formula

Final Difference % = (X) + (Y) + (XY/100).
If it is increased then the value of X or Y is +ve if it is decreased then the value of X or Y is –ve.

So if first it is increased by 10 % and then reduced by 20 % the total effect would be :
10- 20 – (10*20/100) = -12 % or decrease in 12 %.

If it is first decreased by 10 % and then increased by 20 % the net effect would be :
-10 +20 –(10*20/100) = + 8% or increase in 8 %.

If it is first reduced by 10 % and then again reduced by 20 % , the net effect would be :
-10-20 + (10*20/100) = -28 % or decrease in 28 %.

Similarly if increased both time the net effect would be :
10+20+ (10*20/100) = 32 %.


EXAMPLE 1. : The price of T.V set is increased by 40 % of the cost price and then decreased by 25% of the new price . On selling, the profit for the dealer was Rs.1,000 . At what price was the T.V sold.

Ans : From the above mentioned formula we get :
Final difference % = 40-25-(40*25/100)= 5 %.
So if 5 % = 1,000
then 100 % = 20,000.
C.P = 20,000
S.P = 20,000+ 1000= 21,000.


EXAMPLE 2 : The price of T.V set is increased by 25 % of cost price and then decreased by 40% of the new price . On selling, the loss for the dealer was Rs.5,000 . At what price was the T.V sold.

Ans : From the above mentioned formula we get :
Final difference % = 25-40-(25*45/100)= -25 %.
So if 25 % = 5,000
then 100 % = 20,000.
C.P = 20,000
S.P = 20,000 - 5,000= 15,000.

Now solve the following 10 questions and send your soultion .

Q1. Price of certain commodity was first increased by 12 % and then decreased by 6%. This made the final price as Rs. 2632. What was the profit/loss margin in Rs. ?

Q2. Price of certain commodity was first increased by 14% and then reduced by 25 %. The net reduction in the price of the commodity was Rs.406. How much was the price when it was increased by 14 % ?

Q3. Price of certain commodity was first increased by 16 % and then decreased by certain % . The net result was a increase of 1.5 %. By how much % was the price decreased on the second time ?

Q4. Price of certain commodity was first decreased by 10 % and then increased by 7%. This made the final price as Rs.3,852. What was the net profit/loss margin in Rs?

Q5. Price of certain commodity was first decreased by 12.5 % and then increased by Rs 182 which was a 8 % increase. (UrPercentile.com) What was the net profit/loss margin in Rs?

Q6. Which of the following would lead to minimum increase :
a) A net increase in price by 24 % .
b) 2 successive increase of price by 12% each.
c) First increase by 30 % and then decrease by 6 %.
d) First decrease by 4% and then increase by 28 %.

Q7. Two successive decrease of price by 10 % and then 7 % made the price of a commodity to go down by Rs. 978. By how much did the price go down (in Rs ) when the price was reduced for the second time?

Q8. Two successive increase (x% and Y%) in price of a product resulted in increase of price by 45%. The product was sold at Rs. 464. If instead of increasing it by Y% for the second time, it was decreased by y% the product would have been sold at Rs 160 less. What is the value of X. (UrPercentile.com)

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READING COMPREHENSIVE (RC)

Read the article below and answer the question mentioned after the passage :

Source: Frontline

"WHEN Mahyco-Monsanto Biotech (India) Limited launched its flagship Bt cotton seed in Andhra Pradesh amidst a high-decibel campaign in 2002, it would not have factored in the challenges it would face down the years, least of all, on the pricing front.

After all, the launch was in a State known for its progressive farming practices and headed, at that time, by the poster boy of reforms, N. Chandrababu Naidu. Yet problems began almost within a year, when farmers in some districts reported Bt cotton crop failure, a fact still contested by the company. The Chandrababu Naidu government's brinkmanship seen in the way it passed the buck to the Union Ministry of Environment and Forests' Genetic Engineering Approval Committee (GEAC) saved the day for Monsanto.

Bt cotton, a transgenic plant, produces an insect-controlling protein, Cry1A(c), the gene which has been derived from the naturally occurring bacterium, Bacillus thuringiensis (Bt). The cotton hybrid containing the Bt gene produces its own toxin against bollworm, the cotton pest. Since the hybrid cottonseed guards against bollworm, Monsanto named it Bollgard, but it has become commonly known as Bt cotton.

With the change of government in the State, the rules of the game changed. When the crop failed again in some parts of the State for the third consecutive year and the company was reluctant to pay compensation, the government came up with a different strategy to tame the company. Realising the limited options of making a big issue of the technology, which now had wide acceptance, it sought to hit the company where it hurt the most - pricing.

So, when Agriculture Minister N. Raghuveera Reddy announced the decision of dragging the company to the Monopolies and Restrictive Trade Practices Commission (MRTPC) on December 28 for collecting an "abnormally high price", it would have come as a bolt from the blue for Mahyco-Monsanto. It became a watershed event. No State had ever dared to take on the multinational giant in this manner.

Along with Mahyco-Monsanto, three other seed companies, Pro-Agro, Raasi and Nuzvid, all producing and marketing Monsanto's Bt cottonseed, were made respondents. While filing the case before the commission in New Delhi on January 2, the Minister charged the company with indulging in "monopolistic trade practices with unreasonably high prices and limited technical developments".

The restrictive trade practices included "maximising profits and market power and manipulation of the prices through the supply mechanism", he said. Since there was no patent over Bt cotton in India, the company was charging a "trait value" that was different from other countries. The company procured seeds at Rs.200 to Rs.250 for 750 gm from farmers but sold the same to growers at Rs.1,850 a packet of 450 gm. Of this the company held back Rs.1,250 as trait value. In contrast, Monsanto sold a 750 gm packet of the Bt cottonseed at as low a price as Rs.450 a packet in other countries.

He further argued before the commission that the high prices were detrimental to the interest of lakhs of farmers. Mahyco-Monsanto was taking advantage of having monopoly source material of bollworm-resistant technology. Technologies developed by other companies in the country were still in the testing stage and may take three years for commercial production, he said.

The Minister alleged that the company sold seeds worth Rs.130 crores in India since 2002 and held back Rs.78 crores of this amount for itself as trait value. But it never responded to demands to pay Rs.3 crores as compensation to farmers whose crop had failed in Andhra Pradesh.

The company responded quite wryly to the Minister's announcement. Skirting the specific charges of overpricing, charging a high trait value and fixing high profit margin, the company's spokesperson couched the response in generalities. The "pricing philosophy in the agriculture industry is based on sharing the value that products and technology deliver to the farmers," the spokesperson said.

Determination of the price depended on several factors such as replacement cost. It encompassed cost of agronomic methods and their effectiveness, benefits and limitations. It was also based on agronomic benefits such as additional yields, labour, equipment and fuel savings or application flexibility that a product or technology provided farmers, the company said. Interestingly, it also listed out the non-agronomic benefits such as "time saving, efficiency, risk management, peace of mind, etc".

According to the company, technology fee may be part of the prices charged to farmers and are used both to support current products in a market and to fund research that will deliver new products. The fee is shared with the retail technology, seed partners and Monsanto shareholders and cover the costs of doing business.

It further contended that the farmer had recognised the value of Bt cotton or Bollgard technology, and it continued to gain acceptance in India. The ever-increasing area, 3.1 million acres (1,254,500 hectares) now across nine States, demonstrated that the Indian farmer was willing to adopt a technology that delivered consistent benefits in terms of reduced pesticide use and increased income. The company went on to quote the findings of the Indian Marketing Research Bureau survey that the net profit increase for Bt cotton farmers was 60 per cent compared to those who raised conventional cotton.

With the government and the company sticking to their respective stands, an interesting battle is on the cards. The Minister had given enough indications of roping in other States to support his government's battle against the seed giant."

Q9 . You can compare the Bt Cotton to :
1) The cloned sheep , Dolly
2) A new species created having genes of mouse and rabbit.
3) An animal with mutilated body parts.
4) An person who had a surgical operation where the tissue from his own body were moved from one part to another.


Q10. How did the company responded to the announcement of Agriculture Minister ?
1) Humorously with a touch of irony.
2) Censoriously.
3) Apocalyptically
4) The company concurred with the views of the agriculture Minister.

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VOCABULARY :

Imperturbability adj: Calm, not easily agitated or worried.

Placate : To calm down someone or to lessen someone's anger by saying or doing things as required by the person.

Allay v: To calm anger or strong emotion of fear and suspicion or to reduce the intensity of such emotion.

Tranquilize v. To soothe. To induce calmness in a person or an animal, with medication.

Tranquillity n: A state of peace and calm.

Dispassionate adj : calm, impartial, not prejudiced.

Phlegmatic adj : Lack of emotional display, being calm not worried or excited, sluggish temperament.

Equanimity n : Calmness of temperament even under stress.

Answers of Above Hurdle-03
Following are the answers of Hurdle 03 , followed by answers sent by some of our subscribers
Hurdle 03-Answers

  Hurdle 04 : Linear Equations
Following is Hurdle 04 on linear equations. Regards Urpercentile.com. Solving the first one for you
Hurdle 4.htm
  Links of Hurdle 1 to 30
Our Hurdles are prepared on the basis of past entrance tests  papers.

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