Denoma, a major consumer-electronics maker, had a sizeable : GMAT Critical Reasoning (CR)
Check GMAT Club App Tracker for the Latest School Decision Releases http://gmatclub.com/AppTrack

 It is currently 05 Dec 2016, 13:53

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# Denoma, a major consumer-electronics maker, had a sizeable

Author Message
TAGS:

### Hide Tags

Manager
Joined: 08 Apr 2004
Posts: 133
Location: Corea
Followers: 2

Kudos [?]: 627 [0], given: 0

### Show Tags

23 Sep 2004, 15:50
00:00

Difficulty:

(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions

### HideShow timer Statistics

Denoma, a major consumer-electronics maker, had a sizeable decline in sales revenue for its most recent fiscal year. This result appears surprising, because electronics retailers report that although their overall sales were considerably lower than in the previous year, their sales revenue from Denoma models actually grew, largely thanks to some innovative and popular models that Denoma introduced.

Which of the following, if true, does most to explain the apparently surprising result?

A. Because of the need to educate the public about its new modelsâ€™ capabilities, Denomaâ€™s advertising spending was higher than normal over the period.
B. For the period at issue, Denomaâ€™s major competitors reported declines in revenue that were, in percentage terms, greater than Denomaâ€™s.
C. A significant proportion of Denomaâ€™s revenue comes from making components for other consumer-electronics manufacturers.
D. Unlike some of its major competitors, Denoma has no lines of business outside consumer electronics to provide revenue when retail sales of consumer electronics are weak.
E. During the period, consumer-electronics retailers sold remaining units of Denomaâ€™s superseded models at prices that were deeply discounted from those modelsâ€™ original prices.
If you have any questions
New!
Intern
Joined: 23 Sep 2004
Posts: 31
Followers: 1

Kudos [?]: 0 [0], given: 0

### Show Tags

23 Sep 2004, 16:59
Am guessing the answer is E...though B can also be explained in a somewhat roundabout fashion
GMAT Club Legend
Joined: 07 Jul 2004
Posts: 5062
Location: Singapore
Followers: 30

Kudos [?]: 348 [0], given: 0

### Show Tags

23 Sep 2004, 22:59
A. Because of the need to educate the public about its new modelsâ€™ capabilities, Denomaâ€™s advertising spending was higher than normal over the period.
- But we're not sure if higher than normal meant more than the sales income

B. For the period at issue, Denomaâ€™s major competitors reported declines in revenue that were, in percentage terms, greater than Denomaâ€™s.
- Does not tell us why Denoma suffered a deficit

C. A significant proportion of Denomaâ€™s revenue comes from making components for other consumer-electronics manufacturers.
- Out of scope.

D. Unlike some of its major competitors, Denoma has no lines of business outside consumer electronics to provide revenue when retail sales of consumer electronics are weak.
- Yes, but we're told their consumer electronic products are selling well

E. During the period, consumer-electronics retailers sold remaining units of Denomaâ€™s superseded models at prices that were deeply discounted from those modelsâ€™ original prices.
- Here's the answer. The superseded models were selling well, but at a massive discount from the original price. If this is the case, it's no surprise sales revenus is down for Denoma. Also, since it's remaining models being sold, there's no sales of new models to retailers from Denoma.

E for me.
Manager
Joined: 08 Apr 2004
Posts: 133
Location: Corea
Followers: 2

Kudos [?]: 627 [0], given: 0

### Show Tags

24 Sep 2004, 07:03
OA is E
Similar topics Replies Last post
Similar
Topics:
3 Following a major mishap, a pilgrim spot in the country had 2 22 May 2014, 12:33
3 Denoma, a major consumer-electronics maker, had a sizeable 1 21 Apr 2012, 05:58
25 Denoma, a major consumer-electronics maker, had a sizeable 25 05 Jan 2012, 20:17
23 CR - Decision Makers 18 25 Feb 2009, 22:18
2 Denoma, a major consumer-electronics maker, had a sizeable 11 24 May 2008, 07:03
Display posts from previous: Sort by