Hey All,

I got a request to weigh in on this one, but to be honest, I'm unsure where the confusion is. People keep saying that the answer goes against a written premise. It doesn't in the slightest:

During a single hour of a pledge drive for a public radio station, anyone making a pledge of a stated amount was given a free gift. Pledges were encouraged by the announcement that the retail cost of the gift was equal to the amount of the pledge. Yet, at the end of the hour, the total money raised from pledges accounted for a larger dollar amount than the amount organizers had paid for all the free gifts.

This is an "Explain the Discrepancy" question, so all we need to do is write it in our own words.

Discrepancy: Station gives away gift that retails for the same amount as associated pledge, yet station makes profit. How?

Explanation: Pretty obvious that the gifts were donated. This is how the majority of charity auctions are run.

A)The cost of postage was included in the total cost assigned to the gifts, making them seem more expensive to potential donors.
PROBLEM: This doesn't address the issue. Even if cost of postage is included, the station's outlay = pledges if they had to buy the gifts.

B)Organizers underestimated the amount of money that would be raised during the hour and were surprised by the actual total of pledges.
PROBLEM: Again, if they had to buy the gifts, outlay still = pledges.

C)Organizers overestimated the number of donors who would respond to the offer and were forced to offer gifts at half price when there were fewer pledges than expected.
PROBLEM: This wouldn't help at all. In fact, it looks like it would hurt the discrepancy.

D)Free gifts were donated by a sponsor, eliminating the need to subtract the cost of them from the total money raised through pledges.
ANSWER: People keep saying this goes against the premise. But the premise never says the gifts were bought. It says "total money raised from pledges accounted for a larger dollar amount than the amount organizers had paid for all the free gifts." That does not imply that they bought them at all. It just says they made more money than they paid. Even if the amount they paid was $0, this would remain a true premise. I see no contradiction. : )

E)More money was raised during this hour than during the previous three hours, driving down the average out-of-pocket cost of the free gifts.
PROBLEM: Same problem as B.

Hope that helps!

-t
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Tommy Wallach | Manhattan GMAT Instructor | San Francisco

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it's D. If oraganizer does not need to pay the cost of the gifts , whatever fund is raised the radio station gets to keep it. so whatever they raise , the station will always be at profit.

OA please.

Let me try..!!

Organizers had gifts: "Free gifts" can be bought by organizers or sponsors can provide "free gift" to organizers.

AND NOW..

Organizers have to give these gifts to the pledge makers...!! And the any pledge makers will get the "free gift" equivalent to the pledge made.

SO, Let say there 10 pledge makers and each made a pledge $ 10.. so total worth of gifts to be given by organizers shud worth $100.

But let say organizers bought only 8 gifts themselves and 2 were offered by the sponsors..>>>> So, effectively Organizers paid less...|>> funds raised from pledges during the hour accounted for more money than the cost of the "free gifts" PAID by the organizers..

Hope it helps..

Yes verma nice attempt to explain but... Im some how still not convinced with the answer
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One Final Try.......

wrote:

"total money raised from pledges accounted for a larger dollar amount than the amount organizers had paid for all the free gifts."

think about that they may have bought all the gifts at a discount from wholesaller.

Anything that gives you a clue how they received (for free or paid) that "gifts" cheaper have to attract your attention.
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I agree, D seems to be the most probable.
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had paid does not equal bought ---- actually i read this and was reminded of the stupid joke some people say, when they got something for "free ninety nine" - that's how much they paid (free) not how much they bought it for...

Answer should be D, as it clearly gives details about cost of gifts = 0 and thereby proving that

cost to get gifts < amount of money from pledges.

I know this may be a dumb question... The passage claerly says "the total money raised from pledges accounted for a larger dollar amount [highlight]than the amount organizers had paid for all the free gifts[/highlight]."
So it says that they had paid something for the gifts....So how can we assume an answer which is related to donations? please explain?
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Thanks,
VP