These tests will be really helpful to give you a sense of what to expect in the problem solving test.
However, the answers provided by Mc Kinsey in these documents are sometimes not very detailed.
We agree that the conclusion is not very clear on this one.
Our feeling is that, if anything, option C would explain why the proportion of large businesses that are aware of the service is larger than the proportion of small businesses.
Therefore you can rewrite the formula for profit as: Profit = (number of customers x 100) - (10,000 15 x 0.2 x number of customers) = (number of customers) x (100 - 15 x 0.2) - 10,000 Set this equal to zero and re-arrange to get: number of customer to break even = 10,000 / 97 = 103. Yes this is a fairly long question, though setting up the equation as I did above should take less than 2 minutes as it is a standard profit equation. However, you can start by eliminating answers, since clearly 10,000 / 97 is greater than 10,000 / 100 which is 100, so A and B cannot be right.
Then to choose between C and D it might be quicker to verify each answer by multiplication rather than do the division: 97 x 108 is equal to (100-3) x 108 which is 100 x 108 - 3 x 108 which is 10,800 - 324 which you can see is not equal to 10,000 (or if you start from 104, you quickly get the correct answer).
You are right that the fees depend on the volume of trash collected, as mentioned in the introduction.
But this is exactly why the volume should not affect the profit margin.
You should take the word "employee cost" in the question as meaning the same as "employee cost" in the description, i.e. What you need to keep in mind is that if the question would like you to do additional calculations, then it would ask for it specifically, for example by asking for I have doubt about Question 22 from Mckinsey official PST practice test C.
The answer says the new premium income is around 5m which increased about 18% over the original premium income which is 0m?