Difficulty: Medium
Correct Answer: Rs. 60
Explanation:
Introduction / Context:
This question models a realistic situation where a merchant decides whether to store goods or sell them immediately. Over time, the price per kilogram rises, which is good for revenue, but some quantity is lost because of rodents. You need to combine both effects to find the net change in profit when selling after 1 year instead of selling fresh. This is a classic application of profit and loss concepts with both price change and quantity loss considerations.
Given Data / Assumptions:
- Each sealed box contains 10 kg of cashews.
- Current price of fresh cashew = Rs. 120 per kg.
- Price increases by Rs. 20 per kg each year.
- 10% of the cashews are eaten by rodents each year.
- The cost price of the cashews per kilogram is effectively the current fresh price, Rs. 120.
- We compare profit if sold now versus profit if sold after 1 year.
Concept / Approach:
Assume the cost price of one box is based on 10 kg at the current rate. If sold fresh now, there is no price rise and no loss of quantity, so profit can be taken as zero relative to this cost. After 1 year, the price per kg is higher but only 90% of the original quantity remains. We compute the revenue from selling the remaining quantity at the increased price and subtract the original cost. The difference between this profit and the initial profit (which is zero) gives the change in profit from delaying the sale by 1 year.
Step-by-Step Solution:
Step 1: Cost price per kilogram = Rs. 120.
Step 2: Each box contains 10 kg, so cost price per box = 10 * 120 = Rs. 1200.
Step 3: If sold fresh now at Rs. 120 per kg, revenue per box = 10 * 120 = Rs. 1200.
Step 4: Hence initial profit on a fresh sale is zero (1200 - 1200).
Step 5: After 1 year, price per kg rises by Rs. 20 to 140.
Step 6: Rodents eat 10% of the cashews, so remaining quantity is 90% of 10 kg = 9 kg.
Step 7: Revenue after 1 year from one box = 9 * 140 = Rs. 1260.
Step 8: Cost price is still Rs. 1200, so profit after 1 year = 1260 - 1200 = Rs. 60.
Step 9: Change in profit compared to selling fresh now = 60 - 0 = Rs. 60.
Verification / Alternative check:
We can think in terms of effective price per original kilogram. Originally, each kg costs Rs. 120. After 1 year, one box effectively yields 1260 / 10 = Rs. 126 per original kilogram, because the merchant earns Rs. 1260 from an investment of 10 kg at 120 per kg. This effective price is Rs. 6 higher per original kilogram, and for 10 kg, that is a total extra profit of Rs. 60, matching the earlier computation.
Why Other Options Are Wrong:
Rs. 54, Rs. 75, and Rs. 80 correspond to incorrect combinations of price rise and quantity loss, often caused by mis-calculating 10% wastage or by using the new price on the full 10 kg. For instance, wrongly assuming 10 kg are still saleable after one year would give a revenue of 1400, leading to an exaggerated profit. Only Rs. 60 correctly accounts for both the increased price and the 10% loss of cashew quantity.
Common Pitfalls:
A typical mistake is to apply the new price to the full 10 kg without adjusting for rodent loss, or to apply 10% loss on the price instead of the quantity. Another common confusion is whether the question is asking for absolute profit or change in profit. Here, selling immediately yields zero profit relative to the cost, so the change in profit is exactly equal to the profit after 1 year. Careful reading and stepwise calculation avoid these traps.
Final Answer:
By selling a sealed box after one year instead of selling it fresh, Arun's profit increases by Rs. 60 per box.
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