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Comprehension:
The two plots below give the following information about six firms A, B, C, D, E, and F for 2019 and 2023.
PAT: The firm’s profits after taxes in Rs. crores,
ES: The firm’s employee strength, that is the number of employees in the firm, and
PRD: The percentage of the firm’s PAT that they spend on Research and Development (R&D).
In the plots, the horizontal and vertical coordinates of point representing each firm gives their ES and PAT values respectively. The PRD values of each firm are proportional to the areas
around the points representing each firm. The areas are comparable between the two plots, i.e., equal areas in the two plots represent the same PRD values for the two years.
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?
Since we are given that the annual growth rate should be taken as constant, we can simply compare the changes in the firm's PAT in 2019 and 2023 and compare them.
Firm A: 3000 to 3900; an increase of 900
Firm C: 2400 to 3000; an increase of 600
Firm E: 2400 to 3500; an increase of 1100
Firm B: 2800 to 3800; an increase of 1000
The growth is highest for firm E.
Therefore, Option C is the correct answer.
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