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Graphs

Questions involving graphs are more common on the new SAT. Rarely do these questions involve any significant calculating. Usually, the solution is merely a matter of interpreting the graph.

 

Questions 1-4 refer to the following graphs.

Sales And Earnings of Consolidated Conglomerate
Sales
(in millions of dollars)
Earnings
(in millions of dollars)
Note: Figures drawn to scale.

 

Question-1

During which year was the company’s earnings 10 percent of its sales?

  1. 85
  2. 86
  3. 87
  4. 88
  5. 90
Solution

Reading from the graph, we see that in 1985 the company’s earnings were $8 million and its sales were $80 million. This gives

 

The answer is (A).
 

 

Question-2

During the years 1986 through 1988, what were the average earnings per year?

  1. 6 million
  2. 7.5 million
  3. 9 million
  4. 10 million
  5. 27 million
Solution

The graph yields the following information:

 
Year Earnings
1986 $5 million
1987 $10 million
1988 $12 million
 

Forming the average yields .

 

The answer is (C).
 

 

Question-3

In which year did sales increase by the greatest percentage over the previous year?

  1. 86
  2. 87
  3. 88
  4. 89
  5. 90
Solution

To find the percentage increase (or decrease), divide the numerical change by the original amount. This yields

 
 
Year Percentage increase
86
87
88
89
90


The largest number in the right-hand column, 60%, corresponds to the year 1988.

 

The answer is (C).
 

 

Question-4

If Consolidated Conglomerate’s earnings are less than or equal to 10 percent of sales during a year, then the stockholders must take a dividend cut at the end of the year. In how many years did the stockholders of Consolidated Conglomerate suffer a dividend cut?

  1. None
  2. One
  3. Two
  4. Three
  5. Four
Solution

Calculating 10 percent of the sales for each year yields

 
 
Year
10% of Sales (millions)
Earnings (millions)
85
.10 × 80 = 8
8
86
.10 × 70 = 7
5
87
.10 × 50 = 5
10
88
.10 × 80 = 8
12
89
.10 × 90 = 9
11
90
.10 × 100 = 10
8
 
 
Comparing the right columns shows that earnings were 10 percent or less of sales in 1985, 1986, and 1990.
 
The answer is (D).
 




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