Federal law prohibits businesses from reimbursing any : GMAT Critical Reasoning (CR)
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# Federal law prohibits businesses from reimbursing any

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Manager
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29 Jun 2010, 09:32
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Federal law prohibits businesses from reimbursing any employees for the cost of owning and operating a private aircraft that is used for business purposes. Thus, many American companies themselves purchase private aircraft. The vast majority of the business aviation fleet is owned by small and mid-size businesses, and flights are strictly for business purposes, with mostly mid-level employees on board. These companies and their boards of directors are in full compliance with the law and with what is best for their businesses.

Which of the following can be most properly inferred from the statements above?

A) The Federal law in question costs businesses money.
B) Most executives would rather fly on company owned planes than on commercial airlines.
C) Large businesses usually have their executives fly first or business class on commercial flights.
D) Upper level executives are less often in compliance with the law.
E) By not receiving any reimbursement for these flights, the mid-level executives on board are complying with the law.
[Reveal] Spoiler: OA
If you have any questions
New!
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29 Jun 2010, 09:55
Its between A & E.
rest all can be ignored.

A incorrect --> no evidence about relative costs.

E correct -- > the executives following the company's guidelines also are fully complying with the law.

It's clearly stated that mid level employees use flights owned by the business

Hope this helps ~~~
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29 Jun 2010, 09:59
I will go with E
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29 Jun 2010, 11:24
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A) The Federal law in question costs businesses money.
-- Though the federal law in question initially cost money to the business, eventually its beneficial for the business. They save money since they don't have to reimburse the money to their employees. Hence A is not a correct answer choice.

B) Most executives would rather fly on company owned planes than on commercial airlines.
-- New information. Hence B cannot be a correct answer choice.

C) Large businesses usually have their executives fly first or business class on commercial flights.
-- Nothing is mentioned about the large businesses. Hence C is a not a correct answer choice.

D) Upper level executives are less often in compliance with the law.
-- Nothing is mentioned about upper level executives. Hence D cannot be a correct answer choice.

E) By not receiving any reimbursement for these flights, the mid-level executives on board are complying with the law.
-- This is a correct answer choice. Since most mid-level executives travel in company's private jet, according to law they are not supposed to be reimbursed their money.
Thank You.

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Akhil M.Parekh
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29 Jun 2010, 11:38
I didn't like E. Why would an employee be reimbursed for a flight on a company-owned plane?

(I can see how it is the best choice in this case, however.)
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29 Jun 2010, 11:49
michigancat wrote:
I didn't like E. Why would an employee be reimbursed for a flight on a company-owned plane?

(I can see how it is the best choice in this case, however.)

Right...I got stuck on this point alone... I chose E by POE because all the others were not making any sense.
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29 Jun 2010, 11:53
michigancat,

In GMAT we always have to assume the premise put forward by author is correct. Author has its own reasoning. Here the assumption is - employee is supposed to pay for his travels to the company if he is using company's private jet. Though in real world this might not make sense.

I hope I was able to clear your doubts atleast to some extent. Thank You.

Thanks,
Akhil M.Parekh
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30 Jun 2010, 07:27
amp0201 wrote:
michigancat,

In GMAT we always have to assume the premise put forward by author is correct. Author has its own reasoning. Here the assumption is - employee is supposed to pay for his travels to the company if he is using company's private jet. Though in real world this might not make sense.

I hope I was able to clear your doubts atleast to some extent. Thank You.

Thanks,
Akhil M.Parekh

But the laws just prohibit reimbursement of an employee's jet, not of the company's jet!
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03 Jul 2010, 16:28
It is between A and E because B, C and D bring outside information.

Nothing is mentioned about costs in the argument.

Hence E.
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15 Sep 2010, 05:50
Easy One
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28 Sep 2010, 09:56
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Tricky one. (E).

tingle15 wrote:
Federal law prohibits businesses from reimbursing any employees for the cost of owning and operating a private aircraft that is used for business purposes. Thus, many American companies themselves purchase private aircraft. The vast majority of the business aviation fleet is owned by small and mid-size businesses, and flights are strictly for business purposes, with mostly mid-level employees on board. These companies and their boards of directors are in full compliance with the law and with what is best for their businesses.

Which of the following can be most properly inferred from the statements above?

A) The Federal law in question costs businesses money. Nothing in the law forces the businesses to pay anything - in fact, all it does is PROHIBIT them from paying money.
B) Most executives would rather fly on company owned planes than on commercial airlines. No info is given on the preferences of executives.
C) Large businesses usually have their executives fly first or business class on commercial flights. The passage states that most private airplanes are owned by small/medium businesses, so this is trying to trick you into thinking that executives of large businesses must fly commercially (since their businesses don't buy private planes). But there's nothing that prevents those executives from owning their own planes - as long as they aren't reimbursed for them. Also, they could fly coach.
D) Upper level executives are less often in compliance with the law. Again trying to trick you - because most flights are made by mid-level executives, upper level executives must be getting reimbursed. Again wrong, for similar reasons to (C).
E) By not receiving any reimbursement for these flights, the mid-level executives on board are complying with the law. This one tries to trick you with its wording. The law prohibits reimbursements for the employees' own planes, not the business's planes - so at a glance, this might seem irrelevant. But that's the point. It doesn't matter whether they receive reimbursements for these flights, because the planes in question don't fall under the law. So reimbursements or not, the executives on board are complying with the law.
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28 Sep 2010, 10:07
i'll go with E.
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03 Oct 2010, 16:20
E for me. As this was an inference question and we need to find something which valid and yet not in argument, I was debating between B & E.

B) Most executives would rather fly on company owned planes than on commercial airlines.
E) By not receiving any reimbursement for these flights, the mid-level executives on board are complying with the law.

Eliminated B based on additional information related to commercial airlines.
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11 Jun 2013, 04:08
Federal law prohibits businesses from reimbursing any employees for the cost of owning and operating a private aircraft that is used for business purposes. Thus, many American companies themselves purchase private aircraft. The vast majority of the business aviation fleet is owned by small and mid-size businesses, and flights are strictly for business purposes, with mostly mid-level employees on board. These companies and their boards of directors are in full compliance with the law and with what is best for their businesses.

It is been clearly stated that what is best for businesses and therefore
it must be true that they don't have problem with the law
if they would have problem then it would not be best for their businesses
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30 Dec 2013, 15:36
tingle15 wrote:
Federal law prohibits businesses from reimbursing any employees for the cost of owning and operating a private aircraft that is used for business purposes. Thus, many American companies themselves purchase private aircraft. The vast majority of the business aviation fleet is owned by small and mid-size businesses, and flights are strictly for business purposes, with mostly mid-level employees on board. These companies and their boards of directors are in full compliance with the law and with what is best for their businesses.

Which of the following can be most properly inferred from the statements above?

A) The Federal law in question costs businesses money.
B) Most executives would rather fly on company owned planes than on commercial airlines.
C) Large businesses usually have their executives fly first or business class on commercial flights.
D) Upper level executives are less often in compliance with the law.
E) By not receiving any reimbursement for these flights, the mid-level executives on board are complying with the law.
I didn't select E because I thought though board of directors could be in full compliance of Law(Federal Law/State Law/Church Law/abcd Law etc etc)[as per last statement], it was never mentioned that mid-level employees on board are in compliance with every law. Is this line of thinking wrong to discard E that E didn't specify the law boundaries specifically for mid-level employees?

I selected A because it implicitly specified that the boundaries of Law(Federal in this case). The businesses will definitely be purchasing private aircrafts as per the second statement(highlighted above). How could this option be wrong?
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01 Jan 2014, 07:51
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Due to Federal law companies tells its employee ---- If you use your own aircraft for business purpose you wont get reimbursement....probably because reimbursement will be higher than economy class ticket on commercial airline...

Instead, many American companies themselves purchase private aircraft. You can't be paid reimbursement for what you have'nt spent....

so i dont violate the law for receiving free ride and not receiving reimbursement...rightfully so as i don't have any bills to put my claim....

WHAT CAN BE INFERRED......
A) The Federal law in question costs businesses money. In a long run ...this arrangement may be cheaper....INCORRECT
B) Most executives would rather fly on company owned planes than on commercial airlines. ...WHO KNOW'S? INCORRECT
C) Large businesses usually have their executives fly first or business class on commercial flights. ...NOWHERE INFERRED... INCORRECT...
D) Upper level executives are less often in compliance with the law. ........NOWHERE INFERRED... INCORRECT...
E) By not receiving any reimbursement for these flights, the mid-level executives on board are complying with the law.... CORRECT....

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09 Mar 2015, 07:03
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08 Jun 2016, 09:51
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04 Dec 2016, 23:20
seekmba wrote:
It is between A and E because B, C and D bring outside information.

Nothing is mentioned about costs in the argument.

Hence E.

Agreed!

I used the same methodology. However I totally fail to understand how can Manhatten put up such a low quality question
Re: Federal law prohibits businesses from reimbursing any   [#permalink] 04 Dec 2016, 23:20
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