Question

A certain company that sells only cars and trucks reported that revenues from car sales in 1997 were down 11 percent from 1996 and revenues from truck sales were up 7 percent from 1996. If total revenues from car sales and truck sales in 1997 were up 1 percent from 1996, what is the ratio of revenue from car sales in 1996 to revenue from truck sales in 1996?

(A) 1:2
(B) 4:5
(C) 1:1
(D) 3:2
(E) 5:3

Answer 1

Answer:

Option (A) 1 : 2

Step-by-step explanation:

Let the revenue from cars in 1996 be 'x'

and revenue from trucks in 1996 be 'y'

Therefore,

total revenue in 1996 = x + y

According to the question:

In 1997

Total revenue = ( 100% - 11% )x + (100% + 7%)y

= 0.89x + 1.07y                 ..............(1)

Also,

Total revenue in 1997 = ( 100% + 1%)( x + y )

= 1.01( x + y )        ...........(2)

equating 1 and 2

0.89x + 1.07y  = 1.01( x + y )

or

0.89x + 1.07y  = 1.01x + 1.01y

or

0.06y = 0.12x

or

$\frac{x}{y}=\frac{1}{2}$

Hence,

Option (A) 1 : 2