DRDO Multi tasking staff Model paper 5

Let the original cost price be Rs ‘x’
Reduced cost price = (100 – 20)/100 × x = 0.8x
Initial profit = 100% of CP = x
Extra profit due to cost price reduction = x – 0.8x = 0.2x
New profit margin = New profit/CP × 100
⇒ (x + 0.2x) / (0.8x) × 100 = 150%