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A financially strapped publisher of books recently decided

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A financially strapped publisher of books recently decided [#permalink] New post 14 Jan 2013, 09:37
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A
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E

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  75% (hard)

Question Stats:

54% (02:46) correct 46% (01:47) wrong based on 169 sessions
A financially strapped publisher of books recently decided to spend a significant portion of its remaining cash on a shipment of recycled paper pulp that can be used to make paper for a future book. Even though the published book will earn more than the cost of the materials it is printed on, this is a financially foolish decision. The publisher owns rights to tracks of forest land that could be legally cut for pulp at a cost lower than that of the recycled paper pulp.

Each of the following, if true, would provide support for the publisher's decision, EXCEPT:
(A) Federal law requires that timber land that is cut be reseeded to re-grow the forest and this cost is included in the cost to cut the trees for pulp.
(B) The paper mill used by the publisher works much more efficiently with the short strands of recycled pulp than it does with the long strands of newly cut pulp, saving the publisher money on the rental of the mill facility.
(C) The new book will be about recycling and will therefore have poor sales if it is not printed on recycled paper.
(D) The publisher's forest is far from its paper mill, and transportation costs are not included in cost of cutting trees for pulp.
(E) The publisher will sell the rights to the forest land for more than the difference in price between purchased recycled pulp and pulp from newly cut trees.
[Reveal] Spoiler: OA

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Re: A financially strapped publisher of books recently decided [#permalink] New post 14 Jan 2013, 14:55
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PraPon wrote:
A financially strapped publisher of books recently decided to spend a significant portion of its remaining cash on a shipment of recycled paper pulp that can be used to make paper for a future book. Even though the published book will earn more than the cost of the materials it is printed on, this is a financially foolish decision. The publisher owns rights to tracks of forest land that could be legally cut for pulp at a cost lower than that of the recycled paper pulp.

Each of the following, if true, would provide support for the publisher's decision, EXCEPT:

I'm happy to help with this. :-)

Naively, it seems that the publisher is making an unwise decision -- spending its limited funds on recycled paper rather than using the lower cost legally cut pulp from its own forest. We are asked to strengthen the publisher's decision, to provide support for it. This would come in the form of some additional source of revenue doing it this way, or some additional cost in doing it the other way.

(A) Federal law requires that timber land that is cut be reseeded to re-grow the forest and this cost is included in the cost to cut the trees for pulp.
This is tricky --- yes, there's a reseeding cost, but this is already included in the cost of the pulp. Even though the choice discusses an extra cost, there's no addition cost to the publisher beyond what is already discussed in the question. Therefore, this information doesn't change anything from the financial arrangements discussed in the prompt. It's not clear that this does anything to strengthen or weaken anything from the original prompt.

(B) The paper mill used by the publisher works much more efficiently with the short strands of recycled pulp than it does with the long strands of newly cut pulp, saving the publisher money on the rental of the mill facility.
This points out a savings that would result from the publisher's chosen course, which supports why the publisher chose it. This is not correct.

(C) The new book will be about recycling and will therefore have poor sales if it is not printed on recycled paper
This points out a possible cost attached to pursing the path the publisher didn't chose, which supports why the publisher chose the path they did. This is not correct.

(D) The publisher's forest is far from its paper mill, and transportation costs are not included in cost of cutting trees for pulp.
This points out a possible cost attached to pursing the path the publisher didn't chose, which supports why the publisher chose the path they did. This is not correct.

(E) The publisher will sell the rights to the forest land for more than the difference in price between purchased recycled pulp and pulp from newly cut trees.
This points out a source of income that will more than compensate for the apparent cost in the path the publisher choose. This supports the publisher's decision, so this is incorrect.

Because (A) doesn't provide any clear support, and because (B)-(E) all supply very clear support, (A) is the best possible answer here.

Mike :-)
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Re: A financially strapped publisher of books recently decided [#permalink] New post 21 Feb 2014, 12:24
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

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Re: A financially strapped publisher of books recently decided   [#permalink] 21 Feb 2014, 12:24
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