Official Guide Explanation:
Data Sufficiency #52

Background

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Solution and Metadata

Question: 52
Page: 277
Difficulty: 5 (Moderate)
Category 1: Word Problems > Profit >
Category 2: Arithmetic > Ratio and Proportion >
Category 3: Arithmetic > Percents > other

Explanation: If the cost is x and the selling price is y, the profit is y - x. We're looking for what percent the profit was of the cost, or:

(((y - x)/(x))) * 100%

Statement (1) is insufficient. It tells us that the profit was $20, but without knowing the exact cost, we can't answer the question.

Statement (2) is sufficient. If the ratio of the selling price to the cost is (5/4), the selling price is 25% higher than the cost. The profit, then, is 25% of x, which we can plug in for y - x:

(((.25x)/(x))) * 100%

= .25 * 100%

= 25%

Choice (B) is correct.

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