A company has only two divisions: Division A and Division B. Last year, Division A made 60% of the company's total revenue and Division B made 40% of the total revenue. This year, Division A's revenue has decreased by 35% and Division B's revenue has decreased by 5%. Which division had higher revenue this year?
To simplify the calculation, let's assume that the company's total revenue last year was $100. Therefore, Division A made $60 (60% of $100) and Division B made $40 (40% of $100).
This year, Division A's revenue decreased by 35%, which means it made only 65% of its revenue from last year: 60% - (35% of 60%) = 39%. So, Division A made $39 out of the total revenue this year.
Similarly, Division B's revenue decreased by 5%, which means it made 95% of its revenue from last year: 40% - (5% of 40%) = 38%. So, Division B made $38 out of the total revenue this year.
Therefore, Division A had slightly higher revenue this year, with $39 compared to Division B's $38.
To determine which division had higher revenue this year, we need to calculate the revenue for each division after their respective decreases.
Step 1: Calculate Division A's revenue decrease:
This year, Division A's revenue decreased by 35%. To calculate the decreased revenue, multiply the previous revenue by (100% - 35%):
Decreased revenue for Division A = 60% * (100% - 35%) = 60% * 65% = 39%.
Step 2: Calculate Division B's revenue decrease:
This year, Division B's revenue decreased by 5%. To calculate the decreased revenue, multiply the previous revenue by (100% - 5%):
Decreased revenue for Division B = 40% * (100% - 5%) = 40% * 95% = 38%.
Step 3: Compare the revenues:
Comparing the decreased revenues, we find that Division A has 39% revenue and Division B has 38% revenue. Therefore, Division A had higher revenue this year.
To determine which division had higher revenue this year, we need to calculate the revenue for each division after the decrease. Here's how you can do it:
1. Find the revenue change for Division A:
Multiply the total revenue by the percentage decrease: 60% × 35% = 0.6 × 0.35 = 0.21.
Subtract this value from the original revenue of Division A to get the new revenue: Original revenue of Division A - Revenue change = New revenue of Division A.
2. Find the revenue change for Division B:
Multiply the total revenue by the percentage decrease: 40% × 5% = 0.4 × 0.05 = 0.02.
Subtract this value from the original revenue of Division B to get the new revenue: Original revenue of Division B - Revenue change = New revenue of Division B.
3. Compare the new revenues of Division A and Division B to determine which is higher. Whichever division has the higher new revenue will have the higher revenue this year.
Remember to use the decimal form of percentages when calculating the revenue changes.