Russian Alcohol Market, 2011

(Total Revenue - $6200 million)

A leading company takes over the aperitif production category, creating a monopoly which increases
aperitif prices by 15% and digestif prices by 20%. What percentage change to the market’s total revenue
does this activity cause?
4.45

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Explanation
To answer the question, it is important to understand that the increase in aperitif and digestif
prices would only affect revenue from these two categories and the total revenue
(absoluterevenue from other categories would not change, only their relative size). This
means that the size of the increase (the percentage change) in total revenue is equal to the
combined increase in revenues from aperitif and digestif.

Thus, start by calculating the percentage increase in revenue from each of these two
categories.
An increase of 15% in aperitif prices would cause revenues from Aperitif to rise by 15%. Since
revenue from aperitif comprises 15% of the market’s total revenue, total revenue would increase
by: 0.15 x 0.15 = 2.25%.
Similarly, an increase of 20% in digestif prices, which comprises 11% of the market’s total
revenue, would result in a 0.11 x 0.20 = 2.2% increase in total revenue.

Next, sum up the increase in revenues from aperitif and digestif to find the percentage change in
total revenue: 2.25% + 2.2% = 4.45%

The solution provided above is a shortcut that can help you save time. It is also possible to find
the value of the additional revenue and calculate the percentage increase:
 Additional revenue from aperitif = Original revenue from aperitif x Increase in price = 6,200M x
0.15 x 0.15 = $139.5M
Additional revenue from digestif = Original revenue from digestif x Increase in price = 6,200M x
0.11 x 0.2 = $136.4M
Total addition to revenue = 139.5M + 136.4M = $275.9M
This is an increase of 275.9M / 6,200M = 0.0445 = 4.45% to the total revenue
Russian Alcohol Market, 2011
(Total Revenue - $6200 million)

Alcohol market’s relative distribution did not change between 2010, when revenue from whiskey was 479
million dollars, and 2011.
What percentage of the total revenue in 2010 was revenue from beer in 2011 equal to
22.78

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Explanation
First, find the total revenue in 2010. If revenue from whiskey was $479 million, and this
amounted to 8% of revenue, then the total revenue is: 479M / 0.08 = $5987.5 million.

Next, figure out the revenue from beer in 2011. According to the chart, beer generated 22% of
the total $6,200 million revenue in 2011, meaning: 0.22 x 6,200 = $1,364 million.

Finally, calculate the percentage of the total revenue in 2010 that revenue from beer in 2011
was equal to: 1,364 / 5,987.5 = 0.2278 = 22.78%
In 2010 the exchange rate between Yen and pound was 0.007£ (pound per 1 Yen). If the Yen value
reduces by 9% and the earnings of N.I.R.R Ltd increase by 7% (compared to 2010), what will be the
approximate value of its earnings in Yen?
386,340,000

B 38,634

C 36,107

D 3,610,700

E 38,634,000

386,340,000
Explanation
Start by calculating N.I.R.R's future earnings:
Earnings in 2010 x (1 + percentage change) = 230 x 1.07 = 246.1
(Note the data in the chart is provided in tens of thousands of pounds. Thus,
remember to multiply the final result by 10,000).

Now, refer to the currency rates, first by reducing the Yen's value by 9%:
Yen's future value in Pounds: Yen's value in 2010 x (1 - percentage change) =
0.007 x (1 – 0.09) = 0.007 x 0.91 = 0.00637

Convert the earnings in Pounds to Yens: 246.1 / 0.00637 = 38,634

Finally, multiply by 10,000: 38,634 x 10,000 = 386,340,000

The answer is : 386,340,000