CAT 2018 LRDI Questions

There are only four brands of entry level smartphones called Azra, Bysi, Cxqi, and Dipq in a country.

Details about their market share, unit selling price, and profitability (defined as the profit as a percentage of the revenue) for the year 2016 are given in the table below:

In 2017, sales volume of entry level smartphones grew by 40% as compared to that in 2016. Cxqi offered a 40% discount on its unit selling price in 2017, which resulted in a 15% increase in its market share. Each of the other three brands lost 5% market share. However, the profitability of Cxqi came down to half of its value in 2016. The unit selling prices of the other three brands and their profitability values remained the same in 2017 as they were in 2016.


Question No. 1:
The brand that had the highest revenue in 2016 is:
Options:
  1. Dipq
  2. Bysi
  3. Cxqi
  4. Azra

Question No. 2:
The brand that had the highest profit in 2016 is:
Options:
  1. Azra
  2. Bysi
  3. Cxqi
  4. Dipq

Question No. 3:
The brand that had the highest profit in 2017 is:
Options:
  1. Dipq
  2. Bysi
  3. Cxqi
  4. Azra

Question No. 4:
The complete list of brands whose profits went up in 2017 from 2016 is:
Options:
  1. Azra, Bysi, Cxqi
  2. Bysi, Cxqi, Dipq
  3. Cxqi, Azra, Dipq
  4. Azra, Bysi, Dipq

Explanation:

Question 1:

Let the total market size be 100 units. The sales of Azra, Bysi, Cxqi and dipq would be 40, 25, 15 and 20 units respectively.

The revenue would be as follows

Azra = 40 x 15,000 = 6.0 lac

Bysi = 25 x 20,000 = 5.0 lac

Cxgi = 15 x 30,000 = 4.5 lac

Dipq = 20 x 25,000 = 5.0 lac

The brand with the highest revenue is Azra.

Ans : Azra

Question 2:

The profits for the different brands, assuming revenue as in the previous question would be

Azra $- 6.0$ lac $\times \frac { 10 } { 100 } = 60,000$

Bysi $- 5.0$ lac $\times \frac { 30 } { 100 } = 1,50,000$

Cxgi $- 4.5$ lac $\times \frac { 40 } { 100 } = 1,80,000$

Dipq $- 5.0$ lac $\times \frac { 30 } { 100 } = 1,50,000$

The profit is the highest for Cxqi

Ans : Cxqi

Question 3:

The new market share, selling prices and profitability for the different brands are

Now the total sales is 140 units.(Increase of 40%) The profits are as follows

Azra $- 49 \times 15,000 \times \frac { 10 } { 100 } = 73,500$

Bysi $- 28 \times 20,000 \times \frac { 30 } { 100 } = 1,68,000$

Cxgi $- 42 \times 18,000 \times \frac { 20 } { 100 } = 1,51,200$

Dipq $- 21 \times 25,000 \times \frac { 30 } { 100 } = 1,57,500$

The profit is the highest for Bysi

Ans : Bysi

Question 4:

The profits increased for Azra (60,000 – 73,500) for

Bysi (1,50,000 – 1, 68,000) and Dipq (1,50,000 –

1,57,500)

Ans : Azra, Bysi, Dipq


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