Management Sciences: Quantitative Aptitude and Decision Arithmetic
What this section tests
This section checks quantitative and analytical readiness for management study: percentages, ratios, profit and loss, break-even, simple and compound interest, time value of money, basic statistics, and data interpretation from tables and charts. The mathematics is school-level; the difficulty is speed and reading precision.
Core rules
- Percentage change = (new − old)/old × 100. A 20% rise followed by a 20% fall leaves 96% of the original, not 100%.
- Profit and loss are expressed on cost price unless stated; margin is on selling price. They are different numbers.
- Break-even quantity = fixed costs / (price − variable cost per unit); the denominator is the contribution margin.
- Compound interest: A = P(1 + r/n)^(nt); simple interest: A = P(1 + rt).
- Future value: FV = PV(1 + r)^t; discounting runs the same formula backwards.
- The mean is sensitive to outliers; median and mode are not. Standard deviation measures spread, not central tendency.
Worked example
Fixed costs 50 000, price 25 per unit, variable cost 15 per unit. Contribution = 25 − 15 = 10. Break-even = 50 000/10 = 5 000 units. At 6 000 units, profit = 6 000 × 10 − 50 000 = 10 000. Raising price by 2 lifts contribution to 12 and cuts break-even to about 4 167 units - an 8% price change producing a 17% fall in break-even volume.
Traps
Mixing markup (on cost) with margin (on price); assuming equal discount and markup percentages cancel; ignoring the time unit in interest questions (monthly rate × 12 ≠ effective annual rate); inferring causation from a correlation shown in a chart.