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### Introduction to Caselets:

1) The data is usually in the form of a paragraph.
2) It is one of the most difficult to manage since the interpretation of required data in a meaningful manner is left to the student’s ability to comprehend the hidden facts.

## Logical Reasoning Set 8

 BILT has 10% market share in paper and sells 1000 pieces for Rs 10 each. It launches a new product to captivate the customer. The overall market grows by 20% each year for the next 2 years and BILT is able to increase its market by gaining 20% market share every year for the next 2 years. It raises prices by Rs 5 every year. The cost structure has a fixed and a variable component. Its fixed costs are Rs 5000 every year. Variable costs are Rs 5 in the first year and this increases by Rs 3 every year. The market share here refers to the volume, i.e. number of items sold. Revenue = number of items sold * price Profit = Revenue – Total Costs

## Questions Set 8

Q1) What is the market size in the second year?

1) 3600
2) 12000
3) 1200
4) Data Insufficient

Q2) What is BILT's revenue in the first year?

1) 1000
2) 5000
3) 7500
4) 10000

Q3) What was BILT's average revenue over the 3 years?

1) 66000
2) 66330
3) 69330
4) 75000

Q4) What is the profit made by the company in the 3rd year?

1) 26800
2) 59800
3) 64800
4) 46300

Q5) What would BILT's selling price in the 3rd year have been, had the profits in the 3rd year the same as the second year's profit?

1) 15
2) 20
3) 14.5
4) Data Insufficient

SOLUTIONS:

YearBILT ShareMarket SizeSales PriceRevenue
Year 10.110000 10001010000
Year 20.312000 36001554000
Year 30.514400 720020144000
YearRevenuesFixed Cost Variable CostProfit
Year 1100005000 5000
Year 254000 500028800 20200
Year 3144000 500079200 59800
Q1) Option 2.
Q2) Option 4.
Q3) Option 3.
Q4) Option 2.
Q5) Option 3.

Logical Reasoning