Procter&Gamble

Preparation for P&G Problem Solving Test

Explanation of correct answers for practice questions

1- The right answer is “C”

Rationale: The increase in the dollar amount of income from year 1 to year 2 = Year 2 Income – Year 1 Income
Industry Year 1 Year 2 Year 2 – Year 1
Agriculture 22 26 4
Communication 14 17 3
Construction 36 43 7
Finance and Real Estate 78 90 12
Manufacturing 213 218 5
Transportation 27 30 3

As you can see from the above table, finance (the C option) has the largest increase in Dollar amount from year 1 to year 2.

2- The right answer is “E”

Rationale: The increase in the dollar amount of income from year 1 to year 5 = Year 5 Income – Year 1 Income
Industry Year 1 Year 5 Year 5 – Year 1
Agriculture 22 51 29
Communication 14 21 7
Construction 36 57 21
Finance and Real Estate 78 118 40
Manufacturing 213 287 74
Transportation 27 40 13

As you can see from the above table, transportation (the E option) has the smallest increase in Dollar amount from year 1 to year 5.

3- The right answer is “A”

Rationale: The percentage of increase from year 3 to year 4 = Year 4 – Year 3 x 100
Year 3
Industry Year 3 Year 4 Year 4 – Year 3 x 100
Year 3
Agriculture 26 30 15.4%
Communication 18 20 11.1%
Construction 47 52 10.6%
Finance and Real Estate 100 108 8.0%
Manufacturing 226 253 11.9%
Transportation 33 36 9.1%

As you can see from the above table, agriculture (the A option) has the largest percentage increase.

4- The right answer is “D”

Rationale: The percentage of change from year 1 to year 4 = Year 4 – Year 1 X 100
Year 1
Industry Year 1 Year 4 Year 4 – Year 1 x 100
Year 1
Agriculture 22 30 36.3%
Communication 14 20 42.9%
Construction 36 52 44.4%
Finance and Real Estate 78 108 38.5%
Manufacturing 213 253 18.8%
Transportation 27 36 33.3%

As you can see from the above table, manufacturing (the D option) has the least percentage change.

5- The right answer is “A”

Rationale: Compare the difference between Year 2 – Year 1, Year 3 – Year 2, Year 4 – Year 3 and Year 5 – Year 4 across all industries and select the
least consistent amount of difference

Industry Year 2 - Year 1 Year 3 – Year 2 Year 4 – Year 3 Year 5 – Year 4

Agriculture 4 0 4 21
Communication 3 1 2 1
Construction 7 4 5 5
Finance and Real Estate 12 10 8 10
 Manufacturing 5 8 27 34
Transportation 3 3 3 4

As you can see from the above table, agriculture (the A option) has the least consistent trend, as it’s the only industry that moved from growth to flat
progression before it moves back again to growth. Also, the amount of increase in last year was much higher and inconsistent versus the historical
periods where the amount of growth was in the range of “4”.

6- The right answer is “B”

Rationale: Look at the year on year change for the transportation industry and try to apply the same trend on the value of year 5 to come to the
expected amount for year 6.
Industry Year 2 - Year 1 Year 3 – Year 2 Year 4 – Year 3 Year 5 – Year 4
Transportation 3 3 3 4

As you can see from the above table, the year on year change is in the range of 3 to 4. If we apply the same amount of change on year 5, the amount
for year 6 should be in the range of 43 or 44. Therefore, B is the right estimate.

7- The right answer is “C”

Rationale: For each 2 given industries, divide the yearly income of the first one by the yearly income of the second one. Choose the combination
where the result of the before mentioned division operation is most consistently in the range of 0.5 throughout the 5 years.

Industry Year 1 Year 2 Year 3 Year 4 Year 5

Year 1 Year 2 Year 3 Year 4 Year 5
Agriculture/Finance 0.28 0.29 0.26 0.27 0.43
Communication/Agriculture 0.64 0.65 0.69 0.67 0.41
Construction/Finance 0.46 0.48 0.47 0.48 0.48
Finance/Manufacturing 0.37 0.42 0.44 0.43 0.41
Transportation/Communication 1.93 1.76 1.83 1.80 1.90

As you can see from the above table, construction/finance (the C option) is the closest to 0.5 on a consistent trend.

8- The right answer is “D”

Rationale: Calculate the year on year growth rate for all industries and count how many times it reached or exceeded 10%, regardless of the industry
name. To calculate the growth year in a certain year, please apply the below equation:

Growth rate in Yx = Yx – Yx-1 X 100

Yx-1
Industry Growth in Y2 Growth inY3 Growth in Y4 Growth in Y5
Agriculture 18.2% 0% 15.4% 70.0%
Communication 21.4% 5.8% 11.1% 5.0%
Construction 19.4% 9.3% 10.6% 9.6%
Finance 15.4% 11.1% 8.0% 9.3%
Manufacturing 2.3% 3.7% 11.9% 13.4%
Transportation 11.1% 10.0% 9.1% 11.1%

As you can see from the above table, the growth rate reached or exceeded 10% in 14 cases (count all gray shaded cells) and therefore option “D” is
the right answer.

9- The right answer is “E”

Rationale: Calculate the year on year growth rate for all industries and look for the one showing the least fluctuations

Industry Growth in Y2 Growth inY3 Growth in Y4 Growth in Y5

Agriculture 18.2% 0% 15.4% 70.0%
Communication 21.4% 5.8% 11.1% 5.0%
Construction 19.4% 9.3% 10.6% 9.6%
Finance 15.4% 11.1% 8.0% 9.3%
Manufacturing 2.3% 3.7% 11.9% 13.4%
Transportation 11.1% 10.0% 9.1% 11.1%

As you can see from the above table, transportation (option “E”) is the right answer as it has the lowest fluctuations

10- The right answer is “E”

Rationale: For each given combination, calculate the growth rate from year 1 to year 3 and select the option where the 3 industries achieve a growth
rate near 30%-33%.
Combination Y3-Y1 X 100
Y1
Agriculture 18.2%
Communication 28.6%
Transportation 22.2%
 Agriculture 18.2%
Communication 28.6%
Construction 30.6%
Communication 28.6%
Construction 30.6%
Transportation 22.2%
Construction 30.6%
Finance 28.2%
Transportation 22.2%
Communication 28.6%
Construction 30.6%
Finance 28.2%

As you can see from the above table, the shaded combination (option “E”) is the right answer

11- The right answer is “D”

Rationale: Calculate the growth rate from Y1 to Y3 for all industries and count how many industries had a growth rate of at least 20%.

Industry Y3-Y1 X 100

Y1
Agriculture 18.2%
Communication 28.6%
Construction 30.6%
Finance 28.2%
Manufacturing 6.1%
Transportation 22.2%

As you can see from the above table, the growth rate was at least 20% in 4 cases (count all gray shaded cells) and therefore option “D” is the right
answer

12- The right answer is “C”

Rationale: Calculate the percentage increase for the given period for each industry and pick the highest value

Industry Yx-Yx-1 X 100

Yx-1
Agriculture 15.4%
Communication 5.9%
Construction 19.4%
Finance 2.6%
Manufacturing 2.3%

As you can see from the above table, construction (the “C” option) is the right answer

13- The right answer is “B”

Rationale: In line 1,2,3 the author said “A personnel department should first of all think of itself as a research group.” Also, in line 43,44,45 he said,
“These are some important questions that a review function can help answer.” Both statements support the B option, suggesting the description of the
personnel department as a research and review function.

14- The right answer is “E”

Rationale: The paragraph from line 27 to 32 was emphasizing on the importance of having guidelines to help the people carrying out their jobs while
allowing the line managers enough room to have a day-to-day interaction with their people. Therefore, “they” in line 31 refers to the line managers.

15- The right answer is “C”

Rationale: The questions in last paragraph represent the key measures that a personnel department needs to cover in the performance review or
function survey that the author is recommending in line 34 and 35. Since both; performance reviews and function surveys are sort of evaluation of the
efficiency of the personnel department, therefore option “C” is the right answer.

16- The right answer is “E”

Rationale: The author simply stressed on the importance of maintaining the day-to-day interaction between the managers and their own people, but
he didn’t tackle the reasons why he considers such interaction to be essential. Read through the paragraph from line 21 to 32.

17- The right answer is “A”

Rationale: The author from line 21 to 27 mentioned that the personnel department should develop guidelines in order to help people carrying out their
jobs. However he didn’t explain the reasons why these guidelines will help people carrying out their jobs. This is why he further explained in line 27
and provided the rationale behind his argument. Therefore, option “A” is the right answer.

18- The right answer is “D”

Rationale: The author didn’t tackle at all the importance of the interaction between the personnel people and the employees in the various line
departments, which will help the personnel department to better stay in touch with the organization and sense people feelings about the work
environment. He just talked about the interaction between the line managers and their people, but not the interaction between the personnel
department and the people of the organization. Therefore, option “D” is the right answer.

19- The right answer is “B”

Rationale: The author from line 1 to 11 was trying to give the personnel people an overall orientation on how to better perform their jobs and come
up with new approaches to manage their tasks. This was shown in the statement he used in line 9 to wrap up his point of view “It is thinking about
your job and exploring new ways of carrying it out.” Therefore, option “B” is the right answer.

20- The right answer is “C”

Rationale: Original Price = 10 USD
10% Sale Price = 10 USD * 90% = 9 USD
Assume the cost = X.

Since the 10% sale price is 20% greater than the cost, then X + 20%X = 9, then 1.20 X = 9, then X = 9/1.2 = 7.5

21- The right answer is “D”

Rationale: - The paper has been first reduced by 40% to be at 60% of its original size.
- The 60% has been reduced by 20%
- The final size of the paper will then be equal to 60% - 20%*60% = 60% - 12% = 48%

22- The right answer is “B”

Rationale: - Total Department = 60% Females + 40% Males
- Project Team = 15% of the department Females + 25% of the department Males

Therefore: - The % of the females on the project as a % of total females = 60% * 15% = 9%
- The % of the males on the project as a % of total males = 25% * 40% = 10%
- The % of the department working on the project = 9% + 10% = 19%

23- The right answer is “B”

Rationale: Assume: Carburetor = X, Tune up = Y, Brake Pads = Z, Alignment = A, Wheel Balancing = B

Given Facts = X = 2Y, X = 3 Z, then, 2Y = 3Z, then, Z = 2/3 Y

Y = 3A, Y = 3B
X + Y + Z + A + B = 195

Therefore, we can say that: 2Y + Y + 2/3 Y + 1/3 Y + 1/3 Y = 190, then 3Y + 4/3 Y = 195, then Y = 45

24- The right answer is “B”

Rationale: X = 5/8 of the total liquid, then X = 62.5% of the total liquid
Since we only have 25 gallons of X, then 62.5% of the liquid = 25 gallons, then the total liquid = 25/62.5% = 40 gallons

25- The right answer is “B”

Rationale: Original Price = 0.75 USD, Original Cost = 0.60 USD, Original Volume = 1,200,000 Units
Therefore, original profit = (0.75 – 0.60) * 1,200,000 = 180,000 USD
New Cost = 0.60 *1.05 = 0.63 USD, Selling Price = 0.75 USD, New Volume = 2,000,000 Units
New Profit = (0.75 – 0.63) * 2,000,000 = 240,000 USD
Difference between the old and new profits = 240,000 – 180,000 = 60,000 USD