Guide For Examinees Inter-University Psychometric Entrance Test

QUANTITATIVE REASONING

The Quantitative Reasoning domain tests your ability to use numbers and mathematical concepts to
solve mathematical problems, as well as your ability to analyze data presented in a variety of ways,
such as in table or graph form. Only a basic knowledge
knowledge of mathematics is required (the material
studied up to 9th or 10th grades in most Israeli high schools).
All of the Quantitative Reasoning problems take the form of multiple-choice questions, that is, a
question followed by four possible responses, only one of which is the correct answer.
The Quantitative Reasoning sections consist of two categories of questions – Questions and
Problems, and Graph or Table Comprehension.
Questions and Problems cover a variety of subjects taken from
from algebra and geometry. Some
of the questions are presented in mathematical terms; others are word problems, which you must
translate into mathematical terms before solving.
Graph or Table Comprehension questions relate to information appearing
appearing in a graph or a table. A
graph presents data in graphic form,
form, such as a bar chart, line graph or scatter plot. A table presents
data arranged in columns and rows.
In general, all questions of a given type are arranged in ascending order of difficulty
difficulty.. The easier
questions, requiring relatively less time to solve, appear first, with the questions becoming
progressively
progressively more difficult and requiring more time to solve.
The figures accompanying
accompanying some of the questions are not necessarily drawn to scale. Do not rely
solely on the figure's appearance to deduce line length, angle size, and so forth. Howe
However,
ver, if a line
in a figure appears to be straight, you may assume that it is, in fact, a straight line.
A Formula Page appears at the beginning of each Quantitative
Quantitative Reasoning section. This page
contains instructions, general comments and mathematical formulas, which you may refer to during
the test. The Formula Page also appears
appears in the Guide (on the next page) and in the Quantitative
Reasoning sections of the practice test. You should familiarize yourself with its contents prior to
taking the test.

Pages 38-66 contain a review of basic mathematical concepts, covering much of the material
upon which the questions in the Quantitative Reasoning sections
sections are based. The actual test may,
however,
howev er, include some questions involving mathematical concepts and theorems that do not appear
on these pages.
Pages 67-82 contain examples of different types of questions, each followed by the answer and a
detailed explanation.
 Guide For Examinees Inter-University Psychometric Entrance Test

REVIEW
REVIE W OF BASIC MATHEMATICAL
MATHEMATICAL CONCEPTS
SYMBOLS

Symbol Meaning of the Symbol

a || b lines a and b are parallel
a⊥b line a is perpendicular to straight line b
90º angle (right angle)
«ABC the angle formed by line segments AB and BC
x=y x equals y
x≠y x does not equal y
x<y x is less than y
x≤y x is less than or equal to y
a < x, y both x and y are greater than a
x=+a x may be equal to a or to (-a)
|x| the absolute value of x
x:y the ratio of x to y

TYPES OF NUMBERS
Integer: An integer, also called a whole number, is a number composed of whole
units. An integer may be positive, negative,
negative, or 0 (zero).
Example: ... , -4 , -3 , -2 , -1 , 0 , 1 , 2 , 3 , 4 , ...
Note: 0 (zero) is an integer that is neither positive nor negativ
negative.
e.

Non-integer: A number that cannot be expressed in whole units.

1 1
Example: 2 , -1
2
, 2 , 1.37
2

Consecutive numbers: Integers that follow

follow in sequence in differences
differences of 1. For example, 4 and
and
5 are consecutive numbers; 2, 3, and 4 are consecutive numbers; (-3) and
(-2) are also consecutive numbers.
If n is an integer, then n and (n + 1) are consecutive numbers.
This is sometimes expressed as: (n + 1) is the next consecutive integer
after n.

Even number: An integer which, when divided by 2, produces an integer (in other
words, it is evenly divisible by 2). If n is an integer, then 2n is an even
number.
Note: 0 is an even number.

Odd number: An integer which, when divided by 2, produces a non-integer (in other
words, when it is divided by 2, a remainder of one is obtained). If n is
an integer, then 2n + 1 is an odd number.
Quantitative Reasoning

Prime number: A positive integer that is evenly divisible by only two numbers – itself
and the number 1.
For example, 13 is a prime number because it is evenly divisible by only
1 and 13.
Note: 1 is not defined as a prime number.

Opposite numbers (additive inverse):

A pair of numbers whose sum equals zero.
For example, 4 and (-4) are opposite numbers.
In general, a and (-a) are opposite numbers ( a + (-a) = 0). In other
words, (-a) is the opposite number of a.

Reciprocals (multiplicative inverse:)

A pair of numbers whose product is equal to 1.
1 2 7
For example, 3 and 3
are reciprocals, as are 7
and 2
.
In general, for a , b ≠ 0:
1 are reciprocals aa $ 1
a and a =1 k. 1 is the
We can also say that a
a
reciprocal of a.
a b a b b
b
and a
are reciprocals b $ =1
b a
l, or in other words, a
is the reciprocal
a
of .
b

Absolute value: If x > 0, then |x| = x .

If 0 > x, then | x | = -x .

| 0 | = 0.

ARITHMETICAL OPERATIONS
OPERATIONS WITH EVEN AND ODD NUMBERS

even + even = even

odd + odd = even
odd + even = odd

even – even = even

odd – odd = even
even – odd = odd
odd – even = odd

even × even = even

odd × odd = odd
 Guide For Examinees Inter-University Psychometric Entrance Test

There are no similar rules for division. The quotient of two even numbers may be odd b 6
2
l,
=3

even a 4
2
=2 k , or a non-integer b 6
4
=1
1
2
l.

FACTORS (DIVISORS) AND MULTIPLES

A factor (divisor) of a positive integer is any positive integer that divides it evenly (that is, without
a remainder). For example, the factors of 24 are 1, 2, 3, 4, 6, 8, 12, and 24.

A common factor of x and y is a number that is a factor of x and also a factor of y.

For example, 6 is a common factor of 24 and 30.

A prime factor is a factor that is also a prime number. For example, the prime factors of 24 are
2 and 3. Any positive integer (greater than 1) can be written as the product of prime factors. For
example, 24 = 3 · 2 · 2 · 2 = 3 · 2 3

A multiple of an integer x is any integer that is evenly divisible by x. For example, 16, 32, and 88
are multiples of 8.

When the word "divisible" appears in a question, it means "evenly divisible" or "divisible
without a remainder."

MATHEMATICAL OPERATIONS WITH FRACTIONS

Reduction
When the numerator and denominator of a fraction have a common factor, each of them can
be divided by that common factor. The resulting fraction, which has a smaller numerator and
denominator, equals the original fraction. For example, if we divide the numerator and the
denominator of 16
12
by 4, the result is 4
3
, b 16
12
= l.
4
3

Multiplication
To multiply two fractions, multiply the numerators by each other and the denominators by each
other.

Example: 2
3
$5
7
=
2$5
3$7
=
10
21

Division
To divide a number by a fraction, multiply the number by the reciprocal of the divisor.
2
5
Example: 3
= 2
5
$ 83 = 25 $$ 83 = 16
15
8

To multiply or divide an integer by a fraction, the integer can be regarded as a fraction whose
denominator is 1.
2
Example: 2=
1
Quantitative Reasoning

Addition and Subtraction

To add or subtract fractions, they must be converted into fractions that have a common
denominator. A common denominator is a number that is evenly divisible by the denominators of
all of the original fractions. (That is, the denominators of the original fractions are all factors of the
common denominator.) After finding a suitable common denominator, each of the fractions must
be converted into a fraction that has this common denominator. To do so, multiply the numerator
and denominator of each of the fractions by the same integer, so that the number obtained in the
denominator will be the number that was chosen to be the common denominator. Multiplying the
numerator and denominator by the same number is the same as multiplying by 1, and its value
remains unchanged. Once the fractions have a common denominator, add or subtract the new
numerators and reduce the resulting fractions to lowest terms where possible.

EXAMPLE
3
4
+ 1 + 85 = ?
6

We know that 4, 6, and 8 are all factors of 24. Therefore, we can use 24 as a common
24 24 24
denominator: = 6, = 4, =3
4 6 8
We will now convert each of the fractions into fractions with this common denominator:
3 18 1 4 5 15
= , = , =
4 24 6 24 8 24

Thus, 3
+ 61 + 85 = 18 4
+ 24 + 15 = 18 + 4 + 15 = 37
4 24 24 24 24

PERCENTAGES
a
Percentages are a way of expressing hundredths: a% of x is a hundredths of x, or 100
$ x . In
questions containing percentages, convert the percentages to hundredths, and solve as in ordinary
fraction problems.

EXAMPLE
What is 60 percent of 80?
Instead of 60 percent, substitute 60 hundredths and solve it as you would for any multiplication
60 60 80
$
of fractions: 100
80
$ =
100
= 6 8
$ = 48 .

Thus, 60% of 80 is 48.

Questions dealing with change expressed as a percentage refer to the percentage of the original
value, unless otherwise specified.

EXAMPLE
The price of an item that cost 80 shekels was raised by 25%. What is the new price?
Since 25% was added to the old price, the new price is 125% of the old price (100% + 25%).
Therefore, you must calculate 125% of 80.
125
Substitute hundredths for percent and solve: 100
$ 80 = 100 . Thus, the new price is 100 shekels.
 Guide For Examinees Inter-University Psychometric Entrance Test

EXAMPLE
The price of an item dropped from 15 shekels to 12 shekels. By what percentage did the price
drop?
In this example, the change in the price of an item is given, and you are asked to calculate this
change as a percentage.
The difference in the price is 3 shekels out of 15 shekels. You have to calculate what percent of
15 is 3.
a $ 15 = 3. Solve the equation for a:
Convert the question into a mathematical expression: 100
a = 3 $ 100 = 20
15

Thus, the price dropped by 20%.

RATIO
The ratio of x to y is written as x : y.

EXAMPLE
The ratio between the number of pairs of socks and the number of shirts that Eli has is 3 : 2. In
other words, for every 3 pairs of socks, Eli has 2 shirts. Stating it differently, the number of
3
socks that Eli has is 2
greater than the number of shirts that he has.

MEAN (AVERAGE)
The arithmetic mean (average) of a set of numerical values is the sum of the values divided by the
number of values in the set.
When the word "average" appears in a question, it refers to the arithmetic mean.
For example, the average of the set of values 1, 3, 5, 10, and 21 is 8 because
1 + 3 + 5 + 10 + 21 40
= =8
5 5

If the average of a set of numerical values is given, their sum can be calculat ed by multiplying the
average by the number of values.

EXAMPLE
Danny bought 5 items whose average price is 10 shekels. How much did Danny pay for all of
the items?
In this question we are asked to find the sum based on the average. If we multiply the average
by the number of items, we will obtain 10 · 5 = 50. Thus, Danny paid a total of 50 shekels for
all of the items which he bought.

A weighted average is an average that takes into account the relative weight of each of the values
in a set.
Quantitative Reasoning

The probability of two independent events occurring (in parallel or one after another) is
equal to the product of the probabilities of each individual event occurring.

EXAMPLE
Experiment: The tossing of two fair dice, one red and the other yellow.
Event A: obtaining a number that is less than 3 on the red die. The probability of event A is
2 1
= .
6 3
3 1
Event B: obtaining an even number on the yellow die. The probability of event B is 6
= .
2
Since the result of tossing one die does not affect the probability of the result obtained by
tossing the other die, event A and event B are independent events.
The probability of both event A and event B occurring (together) is thus,
the probability the probability 1
× , that is, 3
$ 12 = 16 .
of event A of event B

Let us define two dependent events, A and B (in any given experiment).
The probability of event B occurring given that event A has occurred is:
the number of results common to both A and B
the number of results of A

EXAMPLE
Experiment: The tossing of a die.
What is the probability of obtaining a result that is less than 4 if we know that the result obtained
was an even number?
Event A: an even result is obtained.
Event B: a result that is less than 4 is obtained.

We will rephrase the question in terms of the events: What is the probability of B, given that we
know that A occurred?
Event A has 3 results: 2, 4, and 6.
Event B has 3 results: 1, 2, and 3.
But, if we know that event A occurred, there is only one possible result for B – 2.
In other words, the result 2 is the only result that is common to both A and B.
1
Thus, the probability of B, given that we know that A occurred is 3
.
This probability is different from the probability of B occurring (without our knowing anything
about A), which is equal to 1 2
.

Distance Problems: Distance, Speed (Rate), Time

The speed (rate) at which an object moves is the distance that the object covers in a unit of time.
The formula for the relationship between the speed, the distance the object covers, and the amount
of time it requires to cover that distance is:
s
where = speed (rate)
 Guide For Examinees Inter-University Psychometric Entrance Test

All possible relationships between distance, speed and time can be derived from this formula:
s
t = v
and s = v · t .

EXAMPLE
A train traveled 240 kilometers (km) at a speed of 80 kilometers per hour (kph). How long did
the journey take?
We are given v (80 kph) and s (240 km), and we have to calculate t.
Since the speed is given in kilometers per hour, the traveling time must be calculated in hours.
s 240
Substituting the given information into the formula t = v
, we get t = 80
= 3.

Thus, the journey took 3 hours.

The unit of measurement of two of the variables determines the unit of measurement of the third
variable.
For example, if the distance is expressed in kilometers (km) and the time in hours, then the speed
will be expressed in kilometers per hour (kph).
If the distance is expressed in meters and the time in seconds, then the speed will be expressed in
meters per second.

Meters can be converted to kilometers and seconds to hours, and vice versa. There are 1,000
1
meters in every kilometer (1 meter = 1, 000 kilometer).

1
In every hour, there are 3,600 seconds, which equal 60 minutes (1 second = hour).
3, 600

A speed of 1 meter per hour is equal to a speed of 5

18
c 1, 000
5
meters per second 3, 600 = 18 . m
1
1, 000 3, 600
A speed of 1 meter per second is equal to a speed of 3.6 kilometers per hour = = 3.6
1 1, 000
3, 600

Work Problems: Output (Rate), Work, Time

Output is the amount of work per unit of time.

The formula for the relationship between output, amount of work and the time needed to do the
work is p = wt , where p = output (rate )
w = amount of work
t = time
All possible relationships between output, amount of work and ti me can be derived from this
formula: t = w
p and w = p · t .
Quantitative Reasoning

EXAMPLE
A builder can finish building one wall in 3 hours. How many hours would be needed for two
builders working at the same rate to finish building 5 walls?
We are given the amount of work of one builder (1 wall), and the amount of time he spent
1
working (3 hours). Therefore his output is 3
of a wall in an hour. Since the question involves
1 2
two builders, the output of the two of them together is 2$
3
= 3
walls per hour.

We are also given the amount of work which the two builders must do – 5 walls. We can
5 3 15 1
therefore calculate the amount of time they will need: t = 2
=5
2
=
2
=7 .
$ 2
Thus, they will
1 3
need 7
2
hours to build the walls.
Quantitative Reasoning

CARTESIAN COORDINATE SYSTEM

In a cartesian coordinate system in a plane, there are two number lines (axes) that are perpendicular
to each other. The horizontal line is called the x-axis and the vertical line is called the y-axis. The
numbers along the x-axis increase to the right. The numbers along the y-axis increase upwards.
The axes divide the plane into four quadrants, designated in
the figure by Roman numerals I, II, III, and IV.
y
Each point in the coordinate plane corresponds to a pair of II I
4
x and y values which describe their location relative to the
3
axes. B
2

For example, in the figure, the x-value of point A is 4, and its 1

A
y-value is 1. The x-value of point B in the figure is (-3) and x
-4 -3 -2 -1 1 2 3 4
its y-value is 2. -1

III -2 IV
It is customary to write the x- and y-values of the points in
-3
parentheses, with the x-value to the left of the y-value: (x , y).
-4
Sometimes, the values of a point are written next to the letter
representing the point, for example, A(4 , 1) and B(-3 , 2).
The x- and y-values of a point are sometimes called the
coordinates of that point.
The point in the plane corresponding to (0 , 0) is the point of
intersection of the two axes and is called the origin. y
k
All points on a line parallel to the x-axis have the same 4

y-coordinate, and all points on a line parallel to the y-axis m

3

have the same x-coordinate. 2

1
For example, in the figure, line k is parallel to the y-axis.
x
Thus, all of the points on line k have the same x-coordinate -4 -3 -2 -1 1 2 3 4
-1
(in the figure, x = 1.5).
-2

Line m is parallel to the x-axis. Thus, all of the points on -3

line m have the same y-coordinate (in the figure, y = 2.5). -4

Only one line can be drawn through any two points on a

plane. The part of the line that is located between the two
points is called a line segment.

If a line segment is parallel to the y-axis, its length is the

difference (in absolute value) between the y-coordinates of
the two points.
For example, in the figure, line segment AB is parallel to the y
y-axis. The y-coordinate of point A is 4 and the y-coordinate
of point B is (-3). The difference between the values of the A 4

3
y-coordinates of the two points is 4 – (-3) = 7. Therefore, the
2
length of line segment AB is 7.
1

x
-4 -3 -2 -1 1 2 3 4
-1
The length of a line segment parallel to the x-axis is
-2
calculated in the same way.
B -3

-4
 Guide For Examinees Inter-University Psychometric Entrance Test

If a line segment is not parallel to either of the axes (for example,

line segment EF in the figure), its length can be calculated using
the Pythagorean theorem. Draw a right triangle such that the line y
segment is the hypotenuse and the legs are parallel to the x-axis 4
and the y-axis. The length of the leg parallel to the x-axis equals E
3
the difference between the x-coordinates of points E and F 2
(4 – 2 = 2). The length of the leg parallel to the y-axis equals the F
1
difference between the y-coordinates of points E and F x
-4 -3 -2 -1 1 2 3 4
(3 – 1 = 2). -1

Using the Pythagorean theorem, we can calculate the length of -2

-3
2
the hypotenuse: EF = 2 + 22 = 8 .
-4
Quantitative Reasoning
 Guide For Examinees Inter-University Psychometric Entrance Test

3. One of the companies that manufactures engines decided it will no longer use technology C.
After it implements the decision, what will be the minimum output (in horsepower) of an
engine priced at $3,000 that the company produces?

(1) 500
(2) 400
(3) 300
(4) It is impossible to produce an engine of this kind.

Since the problem states that the company will no longer use
Figure III
technology C, we can ignore this technology area and relate
only to the other technology areas (the shaded regions in figure price of engine
(in $ thousands)
III). Note that in this question we are dealing with an engine 10

whose price is $3,000. Engine prices are represented on the 9

8
A
graph's vertical axis; start by locating the point on the vertical 7

axis that represents a price of $3,000. The further we move to 6

B
5
the right of this point, the greater the output. Thus, if we draw 4
D
a horizontal line from this point (see figure III), the first point C

of contact with one of the technology areas will represent the 2

(500,3)
1
lowest possible output for an engine priced at $3,000. The first
100 200 300 400 500 600 700 800 900 1000
point of contact is with technology area D. This point lies on engine output
the vertical line representing 500 horsepower on the horizontal in horse ower
axis. This is now the minimum output for an engine priced at
$3,000. Therefore, the correct response is ( 1).

4. A certain company is not allowed to produce engines with an output of over 550 horsepower.
Which technologies can the company use to manufacture its engines?

(1) C only
(2) B and C only
(3) C and D only
(4) B, C and D only

Note that we are dealing here with an engine that has an output
of 550 horsepower. Find the point on the horizontal axis that Figure IV
represents an output of 550 horsepower and draw a vertical
line from this point up the entire length of the graph (see (in $ thousands)
10
figure IV). All engines to the right of this line have an output 9

of over 550 horsepower, and all engines to the left of this line 8
A
7
have an output of less than 550 horsepower. The company is 6
B
only allowed to manufacture engines with outputs of less than 5

550 horsepower. It can therefore use only those technologies 4

C D
3
represented by areas that lie at least partly to the left of the line 2

(the shaded areas in figure IV). To the left of the line we find 1

the entire area of technology C, part of the area of technology 100 200 300 400 500 600 700 800 900 1000

B, and part of the area of technology D. Thus, the company engine output
(in horsepower)
can use technologies B, C and D for manufacturing engines
with an output of less than 550 horsepower, and the correct
response is (4).
Quantitative Reasoning

TABLE COMPREHENSION

Study the table below and answer the questions that follow.

The table below contains data on 10 companies from different industries. The companies are
designated by the letters A through J.
For each company, the table shows the industry to which it belongs, its sales volume, the current
year's profits, its asset value, and the number of workers it employs.
For example, Company E deals in electronics, employs 400,000 workers, and has assets valued at
$90 million. The company's sales volume totaled $70 billion this year (9% higher than last year's
sales volume), and its profits amounted to $6,000 million (60% higher than last year's profits).
An example of how to calculate percentage of change: If a certain company's sales volume totaled
$40 billion last year, and this year the volume increased to $50 billion, then the percentage of
change compared to last year is 25% a 5040− 40 $ 100k.

Sales Profits

Percentage Percentage
Asset Number of
Name of Sales (in of change Profits (in of change
Industry value (in $ workers (in
company $ billions) compared $ millions) compared to
millions) thousands)
to last year last year

A Automobile 125 -1.5 -2,000 -150 180 750

B Oil 110 25 6,500 0 100 150

C Oil 105 22 5,000 40 390 100

D Automobile 100 1.5 900 -80 180 350

E Electronics 70 9 6,000 60 90 400

F Automobile 65 7 3,000 15 55 100

G Metals 60 25 1,000 -20 not given 400

H Oil 60 20 3,000 -15 60 120

I Oil 55 15 2,000 7 40 70

J Electronics 50 6 4,500 10 150 300

Note: In answering each question, disregard the information appearing in the other questions.

QUESTIONS AND EXPLANATIONS

1. Which of the companies in the automobile industry has the lowest asset value?

(1) A
 Guide For Examinees Inter-University Psychometric Entrance Test

The industry to which each company belongs is listed in the second column from the left.
It shows that companies A, D and F are the only companies in the automobile industry.
Examining the asset value (second column from the right) of each of these companies, we see
that the asset value of Company A is $180 million, which is also the asset value of Company D.
The asset value of Company F is $55 million. Thus, Company F has the lowest asset value of
the companies in the automobile industry, and the correct response is ( 3).

2. Assuming that profits are divided equally among all the workers in a company, which of the
following companies shows the greatest profit per individual worker?

(1) H
(2) B
(3) C
(4) F

The amount of profit per individual worker is not specified in the table but can be calculated
from the information that does appear in it. The table shows the profit and number of workers
for each company. The profit per individual worker of a particular company is the total profit of
that company divided by the number of workers.
The profits of each company are given in millions of dollars, and the number of workers in
thousands. We can compare companies by simply relating to the numbers appearing in the
table, and show the profit per worker as follows:

H B C F

3, 000 6, 500 5, 000 3, 000

120 150 100 100

It is possible, of course, to calculate the profit per worker and determine the company that
obtains the highest value. But the expressions can be compared without performing this
calculation:
Companies F and H show the same profit (3,000), but in Company F it is divided among fewer
workers (100 < 120); thus, the profit per worker is greater in Company F.
Companies F and C employ the same number of workers (100), but Company C shows greater
total profits (5,000 > 3,000); thus, the profit per worker is greater in Company C.
Companies B and C differ both in terms of the number of workers they employ and in terms
of their total profits. The number of workers employed in Company B is 1.5 times that of
Company C (150 vs. 100). If the total profit of Company B were also 1.5 times greater than
that of Company C, the profit per individual worker would be the s ame for both companies –
that is, if Company B's profit were 5,000 · 1.5 = 7,500. But the total profit of Company B is less
than this amount (6,500 < 7,500). Thus, the profit per worker in Company B is less than the
profit per worker in Company C.
Hence, Company C has the greatest profit per individual worker, and the correct response is ( 3).
It is possible, of course, to calculate the profit per individual worker in Companies B and C:

In Company C, the profit per individual worker is 50 b 5100

, 000
= 50 l while in Company B it is less

than 50 b 6150
, 500
< 50 l . Therefore, the profit per individual worker in Company C is greater.
Quantitative Reasoning

3. What was Company G's sales volume last year (in $ billions)?
(1) 48
(2) 50
(3) 64
(4) 76

Last year's sales volume does not appear in the table, but can be calculated using the current
year's sales volume and the percent of change compared with last year. The table shows that
Company G's sales this year amounted to $60 billion and that its sales increased by 25% over
last year. In other words, its sales volume last year is a value which, if 25% is added to it,
gives 60. This can be expressed in the following equation, where x is last year's sales volume:
25
x+ $ x = 60
100
125
Simplifying the equation: 100
$ x = 60 .
Solving for x: x = 60 $ 100
125
, x = 60 $ 45 = 48

Thus, last year's sales volume for Company G was $48 billion, and the correct response is ( 1).

4. A company's expenditure in a particular year is defined as follows:

(sales in that year) – (profits in that year) = (expenditure for that year)

The company with the greatest expenditure this year belongs to which industry?

(1) Automobile
(2) Oil
(3) Electronics
(4) Metals

To calculate a company's expenditure for this year, subtract profits from sales. The table shows
sales in $ billions, while profits are shown in $ millions. To subtract one from the other, both
must be converted to the same units. Multiplying the sales volume appearing in the table by
1,000 gives us a sales volume in $ millions.
Thus, for example, Company C's sales amount to $105,000 million. Its profits amount to
$5,000 million. Thus, its expenditure is $100,000 million. Using this method, it is possible to
calculate the expenditure of each of the companies appearing in the table and find the company
with the greatest expenditure.
However, this calculation is unnecessary. Given the formula that defines expenditure, it follows
that the higher the sales and the lower the profits, the higher the expenditure. It therefore makes
sense to first examine those companies with the highest sales or lowest profits. Looking at the
table, we see that Company A has the highest sales and also the lowest profits (and it is also the
only company showing a negative profit, that is, a loss). Thus, it is clearly the company with the
greatest expenditure. Company A belongs to the automobile industry, and therefore, the correct
response is (1).