A company produces five product lines (P1, P2, P3, P4, P5). Their annual financial data is provided: | Product Line | Revenue ($) | Cost of Goods Sold (COGS) ($) | Operating Expenses ($) | |--------------|-------------|-------------------------------|------------------------| | P1 | 1,200,000 | 700,000 | 200,000 | | P2 | 900,000 | 500,000 | 150,000 | | P3 | 1,500,000 | 800,000 | 300,000 | | P4 | 800,000 | 400,000 | 180,000 | | P5 | 1,100,000 | 600,000 | 170,000 | Based on the data, identify the product line with the highest Gross Profit Margin (GPM = (Revenue - COGS) / Revenue) and the product line with the lowest Operating Expenses.

The correct answer to the question "A company produces five product lines (P1, P2, P3, P4, P5). Their annual financial data is provided: | Product Line | Revenue ($) | Cost of Goods Sold (COGS) ($) | Operating Expenses ($) | |--------------|-------------|-------------------------------|------------------------| | P1 | 1,200,000 | 700,000 | 200,000 | | P2 | 900,000 | 500,000 | 150,000 | | P3 | 1,500,000 | 800,000 | 300,000 | | P4 | 800,000 | 400,000 | 180,000 | | P5 | 1,100,000 | 600,000 | 170,000 | Based on the data, identify the product line with the highest Gross Profit Margin (GPM = (Revenue - COGS) / Revenue) and the product line with the lowest Operating Expenses." is Option B: Highest GPM: P4, Lowest OpEx: P2.

The other options — A) Highest GPM: P1, Lowest OpEx: P3, C) Highest GPM: P3, Lowest OpEx: P5, D) Highest GPM: P2, Lowest OpEx: P4 — are incorrect for this GMAT Exam Prep question. As explained above: Calculate GPM for each: P1=(1.2M-0.7M)/1.2M = 41.67%; P2=(0.9M-0.5M)/0.9M = 44.44%; P3=(1.5M-0.8M)/1.5M = 46.67%; P4=(0.8M-0.4M)/0.8M = 50%; P5=(1.1M-0.6M)/1.1M = 45.45%. Highest GPM is P4 (50%). Low…