If the sales revenues in the year 2005, and 2006 and 2007 increases by `20% , 25% and 30%` respectively and the costs of production in the years 2007,2008, and 2009 increases by `20%, 25% and 35%` respectively, what will be the difference between average sales revenue and average cost of production ?

Options

A. Rs. `185.59` thousands
B. Rs. `188.59` thousands
C. Rs. `174.59` thousands
D. Rs. `200.59` thousands

Answer

C

Explanation

Increased in sales revenue:
Year 2005 `implies(725xx120)/(100)=RS870` thousand
Year 2006 `implies(550xx125)/(100)=RS687.5` thousand
Year 2007 `(600 xx130)/(100)=RS780` thousand
Average revenue
`=(870+687.5+780)/(3)`
`=(2337.5)/(3)`
=RS 779.17 thousand
Increase in production cost
Year `2007implies(400xx120)/(100)`
= RS 480 thousand
Yeat 2008 `implies(500xx125)/(100)`
=RS 625 thousand
Year 2009
=RS 708.75 thousand
Average cost
`implies((480+625+708.75)/(3))` thousand
`=(1813.75)/(3)`
=RS 604.58 thousand
Difference
=RS (779.17-604.58)` thousand
=RS174.59 thousand