Find all School-related info fast with the new School-Specific MBA Forum

It is currently 16 Apr 2014, 08:21

Hurry Up:

Last day of registration for Dealing with a Ding - Webinar by GMATClub and Admissionado Consulting.


Close

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
Your Progress

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

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

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

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
SVP
SVP
Joined: 14 Dec 2004
Posts: 1711
Followers: 1

Kudos [?]: 27 [0], given: 0

GMAT Tests User
Denoma, a major consumer-electronics maker, had a sizeable [#permalink] New post 28 Jan 2006, 06:15
00:00
A
B
C
D
E

Difficulty:

  5% (low)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions
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 models’ capabilities, Denoma’s advertising spending was higher than normal over the period.
B. For the period at issue, Denoma’s major competitors reported declines in revenue that were, in percentage terms, greater than Denoma’s.
C. A significant proportion of Denoma’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 Denoma’s superseded models at prices that were deeply discounted from those models’ original prices.
VP
VP
User avatar
Joined: 29 Dec 2005
Posts: 1352
Followers: 6

Kudos [?]: 25 [0], given: 0

GMAT Tests User
Re: CR: Denoma [#permalink] New post 28 Jan 2006, 06:23
C. A significant proportion of Denoma’s revenue comes from making components for other consumer-electronics manufacturers.
Manager
Manager
Joined: 15 Aug 2005
Posts: 202
Location: New York
Followers: 1

Kudos [?]: 1 [0], given: 0

GMAT Tests User
 [#permalink] New post 28 Jan 2006, 06:31
C.

A significant proportion of Denoma’s revenue comes from making components for other consumer-electronics manufacturers.

Sales to these consumer-electronics manufacturers dropped significantly, while sales increase in Denoma models didn't have significant impact on the company's overall revenues.
Current Student
User avatar
Joined: 29 Jan 2005
Posts: 5253
Followers: 21

Kudos [?]: 110 [0], given: 0

GMAT Tests User Reviews Badge
 [#permalink] New post 28 Jan 2006, 06:56
This mind bender took me almost 5 minutes to solve. At last I came to the conclusion that the answer must be (C) by POE and logic. If a significant portion of their sales come from components sales to other competing consumer electronics firms, then it logically follows that they have lost revenue because of the industry wide decrease in sales.

OA please.
SVP
SVP
Joined: 14 Dec 2004
Posts: 1711
Followers: 1

Kudos [?]: 27 [0], given: 0

GMAT Tests User
 [#permalink] New post 28 Jan 2006, 07:02
Good work :-D The OA I have is "C".
But in one of the previous posts, the OA is "E"

I think it should be "C"
Intern
Intern
Joined: 24 Jan 2006
Posts: 26
Followers: 0

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

 [#permalink] New post 31 Jan 2006, 03:40
I think its (E)

As the sales revenue have declined for Denoma also, but the argument also says that retailers have said "sales revenue from Denoma models actually grew" this means more number of Denoma models had been sold.
Option (E) states - "During the period, consumer-electronics retailers sold remaining units of Denoma’s superseded models at prices that were deeply discounted from those models’ original prices."

Which includes explanation of decreasing Denoma revenues as no new purchases were made by retailers from Denoma but they sold remaining sets, also since a higher no. of units were sold this explains why retailers had higher revenue from Denoma products
VP
VP
User avatar
Joined: 20 Sep 2005
Posts: 1023
Followers: 3

Kudos [?]: 24 [0], given: 0

GMAT Tests User
 [#permalink] New post 31 Jan 2006, 16:09
I believe it's E.

During the period, consumer-electronics retailers sold remaining units of Denoma’s superseded models at prices that were deeply discounted from those models’ original prices.

This explains the higher revenue from the selling the newer models but the loss of revenue from selling older models.
Director
Director
Joined: 26 Sep 2005
Posts: 587
Location: Munich,Germany
Followers: 1

Kudos [?]: 7 [0], given: 0

GMAT Tests User
 [#permalink] New post 31 Jan 2006, 22:30
E for me as well.

C could attempt to explian only a part of the story- that Denoma makes products for other companies and due to a slump its sales suffered but doesnt explain why the retailers should enjoy higher Denoma product sales

whereas E, makes it clear- during the sales lsump, the retailers sold other models of Denoma products at a steep disc- which increased their sales and on the other hand, the slump contributed to declining sales of Denoma.

my $0.02
Senior Manager
Senior Manager
User avatar
Joined: 11 Jan 2006
Posts: 273
Location: Chennai,India
Followers: 1

Kudos [?]: 3 [0], given: 0

GMAT Tests User
 [#permalink] New post 01 Feb 2006, 11:42
i think it is E too !

its where they say that the price is actually low so even when the revenue for the retailers is high the producer suffer !

700s club... vivek , prof GMATT73 can u guys tell y u ppl preferred C to E ?
_________________

vazlkaiye porkalam vazltuthan parkanum.... porkalam maralam porkalthan maruma

  [#permalink] 01 Feb 2006, 11:42
    Similar topics Author Replies Last post
Similar
Topics:
New posts Denoma, a major consumer-electronics maker, had a sizeable marine 3 23 Sep 2004, 15:50
New posts Denoma, a major consumer-electronics maker, had a sizeable nakib77 9 24 Dec 2005, 09:47
Popular new posts Denoma, a major consumer-electronics maker, had a sizeable jerrywu 21 26 Sep 2006, 07:16
Popular new posts 2 Denoma, a major consumer-electronics maker, had a sizeable mymba99 11 24 May 2008, 07:03
Popular new posts 4 Experts publish their posts in the topic Denoma, a major consumer-electronics maker, had a sizeable gmatpunjabi 16 05 Jan 2012, 20:17
Display posts from previous: Sort by

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

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.