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Companies considering new cost-cutting manufacturing [#permalink]
04 Jul 2005, 03:44
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Companies considering new cost-cutting manufacturing processes often compare the projected results of making the investment against the alternative of not making the investment with costs, selling prices, and share of market remaining constant.
Which of the following, assuming that each is a realistic possibility, constitutes the most serious disadvantage for companies of using the method above for evaluating the financial benefit of new manufacturing processes?
(A) The costs of materials required by the new process might not be known with certainty.
(B) In several years interest rates might go down, reducing the interest costs of borrowing money to pay for the investment.
(C) Some cost-cutting processes might require such expensive investments that there would be no net gain for many years, until the investment was paid for by savings in the manufacturing process.
(D) Competitors that do invest in a new process might reduce their selling prices and thus take market share away from companies that do not.
(E) The period of year chosen for averaging out the cost of the investment might be somewhat longer or shorter, thus affecting the result.
There are far fewer children available for adoption than there are people who want to adopt. Two million couples are currently waiting to adopt, but in 1982, the last year for which figures exist, there were only some 50,000 adoptions.
Which of the following statements, if true, most strengthens the authorâ€™s claim that there are far fewer children available for adoption than there are people who want to adopt?
(A) The number of couples waiting to adopt has increased significantly in the last decade.
(B) The number of adoptions in the current year is greater than the number of adoptions in any preceding year.
(C) The number of adoptions in a year is approximately equal to the number of children available for adoption in that period.
(D) People who seek to adopt children often go through a long process of interviews and investigation by adoption agencies.
(E) People who seek to adopt children generally make very good parents.
Archaeologists seeking the location of a legendary siege and destruction of a city are excavating in several possible places, including a middle and a lower layer of a large mound. The bottom of the middle layer contains some pieces of pottery of type 3, known to be from a later period than the time of the destruction of the city, but the lower layer does not.
The force of the evidence cited above is most seriously weakened if which of the following is true?
(A) Gerbils, small animals long native to the area, dig large burrows into which objects can fall when the burrows collapse.
(B) Pottery of types 1 and 2, found in the lower level, was used in the cities from which, according to the legend, the besieging forces came.
(C) Several pieces of stone from a lower-layer wall have been found incorporated into the remains of a building in the middle layer.
(D) Both the middle and the lower layer show evidence of large-scale destruction of habitations by fire.
(E) Bronze axheads of a type used at the time of the siege were found in the lower level of excavation.