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Board member: We are excited to announce that the Galaxy

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Board member: We are excited to announce that the Galaxy [#permalink] New post 09 Jul 2012, 07:00
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E

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78% (01:00) correct 21% (02:01) wrong based on 70 sessions
Board member: We are excited to announce that the Galaxy cell phone has been voted the most reliable for the second year in a row. I would now like to intriduce the new Galaxy II cell phone, which will surely increase revenues for our cellular company. Although our phones are currently the most popular on the market, we have consistently generated more revenue from cell phone accessories, such as chargers, batteries, and headsets, than we have from phone sales. To ensure the continuation and increase in the revenues, despite the introduction of our competitor's low price "universal" accessories, which work with all cell phones, we have added a new "exclusivity" feature to all of our new phones. This will prevent the phone from operating with any non-Galaxy accessories or batteries.

Which of the following if true, most strongly supports the projection that the new Galaxy II phones will lead to an increase in revenues?

A) Two of the major cell phone manufacturers have announced that they will also equip their new phones with an exclusivity feature.

B) One of the main reasons for Galaxy's leading position is that it offers consistently lower prices on cell phones.

C) Annual sales of cell phones have been increasing and are projected to continue to increase over the next five years.

D) The universal accessories found on the market are manufactured by a subsidiary of Universe Cellular, the second largest cell phone manufacturer.

E) The new Galaxy II cell phone offers several exclusive, new features as well as the smallest size and lightest weight of any phone to be introduced this year, at a substantially discounted price.


OA is E)

Does not make much sense to me... as the major revenue is generated by accessories...?


Source is Kaplan
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Re: Galaxy cell phone - Kaplan Test Prep [#permalink] New post 09 Jul 2012, 11:53
How did you get E? The main revenue is generated by accessories, so it should somehow relate to this? Is E not somehow out of scope? Please explain
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Re: Galaxy cell phone - Kaplan Test Prep [#permalink] New post 09 Jul 2012, 12:06
The question states "what supports the projection that will help in increasing the revenues" . So the introduction of these exclusive features will help in increasing the revenues.
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Re: Galaxy cell phone - Kaplan Test Prep [#permalink] New post 09 Jul 2012, 12:10
Got it.... Two of the major cell manufacturers might be too week as there are only two out of XY that actually add the exclusivity feature.
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Re: Galaxy cell phone - Kaplan Test Prep [#permalink] New post 09 Jul 2012, 15:55
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E with doubt in 50 secs

Is the only answer that makes the stimulus a bit more true
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Re: Galaxy cell phone - Kaplan Test Prep [#permalink] New post 10 Jul 2012, 00:21
Choice E is the answer. Remember, we only need to increase the revenues, not profit. Although the competitor of Galaxy company sell the accessories with lower price. Publishing new exclusively accessories with discounted price will help it regain the market share from their competitors, increasing revenues.
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Re: Galaxy cell phone - Kaplan Test Prep [#permalink] New post 10 Jul 2012, 01:44
Straight E.

Simply out, none of the other answer choices speak to why the new phones will increase profits. Not sure this a 700-level question.

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Re: Board member: We are excited to announce that the Galaxy [#permalink] New post 11 Nov 2012, 13:39
Expert's post
Nothing in the passage mentions anything about "growth" over the "next 5 years". The claim in the passage is that revenues will go up...we know they are projected to go up ...but we do not know they are projected to go up specifically over the next 5 years.

(C) simply elaborates on revenue projection going up....simply elaborating on the time frame. It is not something that SUPPORTS the claim and explains why revenues are going to go up.

(E) answers the challenge question. "How do we know that revenues are going to go up?" Because (E) mentions the exclusive feature ...this will force the Galaxy phone buyers to buy Galaxy accessories...they cannot buy the cheaper "universal" accessories - it's no longer an option. Since consumers are buying Galaxy accessories and NOT other universal accessories (and also encouraged to do so because of the "discounted" price) then the revenue is going to increase from more Galaxy accessory sales....where previous customers may have bought universal accessories, they now are buying Galaxy accessories.

If that is true, this is a statement that supports the higher revenue projections for Galaxy. Thus (E) is the better answer.
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Re: Board member: We are excited to announce that the Galaxy [#permalink] New post 13 Nov 2012, 08:34
miura wrote:
Board member: We are excited to announce that the Galaxy cell phone has been voted the most reliable for the second year in a row. I would now like to intriduce the new Galaxy II cell phone, which will surely increase revenues for our cellular company. Although our phones are currently the most popular on the market, we have consistently generated more revenue from cell phone accessories, such as chargers, batteries, and headsets, than we have from phone sales. To ensure the continuation and increase in the revenues, despite the introduction of our competitor's low price "universal" accessories, which work with all cell phones, we have added a new "exclusivity" feature to all of our new phones. This will prevent the phone from operating with any non-Galaxy accessories or batteries.

Which of the following if true, most strongly supports the projection that the new Galaxy II phones will lead to an increase in revenues?

A) Two of the major cell phone manufacturers have announced that they will also equip their new phones with an exclusivity feature.

B) One of the main reasons for Galaxy's leading position is that it offers consistently lower prices on cell phones.

C) Annual sales of cell phones have been increasing and are projected to continue to increase over the next five years.

D) The universal accessories found on the market are manufactured by a subsidiary of Universe Cellular, the second largest cell phone manufacturer.

E) The new Galaxy II cell phone offers several exclusive, new features as well as the smallest size and lightest weight of any phone to be introduced this year, at a substantially discounted price.


OA is E)

Does not make much sense to me... as the major revenue is generated by accessories...?


Source is Kaplan


The question is such a poor construction with so many visible errors that on first reading I thought that it must be a question by one of the local second-class test prep companies. I was surprised to know that it is from Kaplan.

Even the options are very poorly constructed. However, let's ignore this part for the sake of this discussion.

It is, I think, quite clear that only option C and E can qualify to be the answers.

option C: Annual sales of cell phones have been increasing and are projected to continue to increase over the next five years.
Option E: The new Galaxy II cell phone offers several exclusive, new features as well as the smallest size and lightest weight of any phone to be introduced this year, at a substantially discounted price.

Actually, as I can see that combining the two options would almost ensure that the revenues increase. Just one of these can't ensure revenues to rise. However, our objective is not to find the option which ensure the increase in revenues; our objective is to find one which most strongly leads to increase in revenues.

Thus, we need to find the more important or stronger of these two options. This is actually difficult.
If I say option C is stronger, then one may argue "what if the phone is not good?". Obviously if the phone is poor, it will not lead to increase in revenues. So, for option C to lead to increase in revenues, I'll need to make an assumption about the quality of phone.
If I say option E is stronger, then one may argue "what if the annual sales of cell phone (industry) are falling almost 20% (or 40%) each year". In that case also, it may not lead to increase in revenues. Thus, for option E to lead to increase in revenues, I'll need to make an assumption about industry growth.

So, it's a close call.

I go with option E since I think making an assumption that the industry is not facing falling revenues is more palatable to me than making an assumption about the quality of phone vis-a-vis competitors.

Regards,
CJ
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Re: Board member: We are excited to announce that the Galaxy [#permalink] New post 13 Nov 2012, 20:20
Expert's post
Hi folks,

The plan here is to increase revenues by forcing Galaxy owners to buy only officially sanctioned, "exclusive" compatible accessories. The problem with this plan? People might run for the hills! In fact, it could backfire--people who buy non-Galaxy phones will no longer be able to use Galaxy add-ons!

So, what would make this plan more likely to succeed? We need to know if people will buy the new Galaxy II phone, and therefore be "locked in" to purchasing Galaxy accessories. And if (E) is true, then Galaxy is the best and cheapest phone on the market--it is sure to sell, and thus, so are its accessories. (E) is therefore the correct answer, as it clearly strengthens the argument.
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Re: Board member: We are excited to announce that the Galaxy   [#permalink] 13 Nov 2012, 20:20
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