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Answer the question on the basis of the following information.

The following is the Wholesale Price Index (WPI) of a select list of items with the base year of 1993-94. In other words, all the item prices are made 100 in that year (1993-94). Price in all other years for an item are measured with respect to its price in the base year. For instance, the price of cement went up by 1% in 1994-95 as compared to 1993-94. Similarly, the price of power went up by 3% in 1996–97 as compared to 1993-94.

 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 All Items 100 102.0 102.5 104.00 103.00 105.00 106.00 108.00 107.00 106.00 Cement 100 101.0 100.5 103.00 102.50 103.50 103.10 103.80 103.70 104.00 Limestone 100 102.0 102.5 102.75 102.25 103.00 104.00 105.00 104.50 105.00 Power 100 101.5 102.5 103.00 103.50 104.00 106.00 107.00 107.50 108.00 Steel 100 101.5 101.0 103.50 104.00 104.25 105.00 105.50 106.00 105.50 Timber 100 100.5 101.5 102.00 102.50 102.00 103.00 103.50 104.00 104.50 Wages 100 101.5 103.0 103.50 104.00 104.25 104.00 104.75 104.90 105.30

Let us suppose that one bag of cement $(50$ kgs) consumes $100$ kgs of limestones and $10$ units of power. The only other cost item in producing cement is in the form of wages. During $1993-94,$ limestone, power and wages contribute, respectively, $20\%, 25\%,$ and $15\%$ to the cement price per bag. The average operating profit $(\%$ of price per cement bag) earned by a cement manufacturer during $2002-03$ is closest to

1. $40 \%$
2. $39.5\%$
3. $38.5 \%$
4. $37.5 \%$

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