Assume that the annual rate of growth in PAT over the previous year (ARG) remained constant over theyears for each of the six firms. Which among the firms A, B, C, and E had the highest ARG?

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Question :

Assume that the annual rate of growth in PAT over the previous year (ARG) remained constant over the
years for each of the six firms. Which among the firms A, B, C, and E had the highest ARG?

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A.
Firm A
B.
Firm C
C.
Firm E
D.
Firm B

Option C is the correct answer.

Explanatory Answer

The question is "Assume that the annual rate of growth in PAT over the previous year (ARG) remained constant over the years for each of the six firms. Which among the firms A, B, C, and E had the highest ARG? "

Answer:

Since the annual growth rate in PAT is constant, we can compare the ratio changes in the firm’s PAT in 2019 and 2023 and then compare them.

Firm A: 3900 / 3000 = 1.3

Firm B: 3800 / 2800 = 1.35

Firm C: 3000 / 2400 = 1.25

Firm E: 3500 / 2400 = 1.45

Therefore, the highest among these will be for E.