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Formulas for cash flow and the ratio of debt to equity do

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Formulas for cash flow and the ratio of debt to equity do [#permalink]

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New post 15 Mar 2011, 20:24
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68% (01:58) correct 32% (01:20) wrong based on 128 sessions

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312. Formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses, because they are growing and are seldom in equilibrium.
(A) Formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses, because they are growing and are seldom in equilibrium.
(B) Because they are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses.
(C) Because they are growing and are seldom in equilibrium, new small businesses are not subject to the same applicability of formulas for cash flow and the ratio of debt to equity as established big businesses.
(D) Because new small businesses are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to them in the same way as to established big businesses.
(E) New small businesses are not subject to the applicability of formulas for cash flow and the ratio of debt to equity in the same way as established big businesses, because they are growing and are seldom in equilibrium.
[Reveal] Spoiler: OA
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Re: 312/1000 - Small business vs big business [#permalink]

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New post 15 Mar 2011, 20:45
fanatico wrote:
312. Formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses, because they are growing and are seldom in equilibrium.
(A) Formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses, because they are growing and are seldom in equilibrium.
(B) Because they are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses.
(C) Because they are growing and are seldom in equilibrium, new small businesses are not subject to the same applicability of formulas for cash flow and the ratio of debt to equity as established big businesses.
(D) Because new small businesses are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to them in the same way as to established big businesses.
(E) New small businesses are not subject to the applicability of formulas for cash flow and the ratio of debt to equity in the same way as established big businesses, because they are growing and are seldom in equilibrium.


In A,B Structurally "they" refers to formulas which is wrong
In C and E applicability of formulas is wordy .....I think verb forms are always better than noun forms in GMAT..
Thus D.
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Re: 312/1000 - Small business vs big business [#permalink]

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New post 15 Mar 2011, 21:36
Between C and D

In C - "they" refers to small businesses but comparison is wrong.

D remains.
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Re: 312/1000 - Small business vs big business [#permalink]

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New post 15 Mar 2011, 21:45
Thank you...missed to notice the comparison problem in C
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Re: 312/1000 - Small business vs big business [#permalink]

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New post 15 Mar 2011, 21:53
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(A) Formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses, because they are growing and are seldom in equilibrium.:Subject of first clause is formulas- formaulas dont apply- so in the clause satrting with because- the subject 'they' stands for formula. Inappropriate, hence wrong.
(B) Because they are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses.Same reason as above - formulas are the subject pointed to by 'they' in the because part of the sentence.Incorrect
(C) Because they are growing and are seldom in equilibrium, new small businesses are not subject to the same applicability of formulas for cash flow and the ratio of debt to equity as established big businesses.Applicability sounds unidiomatic- also sentence seems to imply that formulas dont apply at all-while the implication should be that the formulas dont apply in the same way as to the big businesses
(E) New small businesses are not subject to the applicability of formulas for cash flow and the ratio of debt to equity in the same way as established big businesses, because they are growing and are seldom in equilibrium.awckward and wordy construction, use of applicability- [/quote]
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Re: Formulas for cash flow and the ratio of debt to equity do [#permalink]

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New post 18 Jun 2014, 04:31
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I'm too late on this question. However it could help you. I could find a a clash between "C" and "D"..

In C, "as" is used to compare the 2 nouns (small and big business), which is wrong.
In D, "as" is used to compare the ways used in small and big business that makes it right.

Help me if I am wrong...
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Re: Formulas for cash flow and the ratio of debt to equity do [#permalink]

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New post 26 Nov 2015, 09:43
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OE:

In A, the they after because is ambiguous; it seems illogically to refer to Formulas because they and Formulas are each the grammatical subject of a clause and because the previous they refers to Formulas.

In A and B, do not apply to in the same way as they do to is wordy and awkward.

D, the best choice, says more concisely in the same way as to.

Also in B, because they refers to formulas, the introductory clause states confusedly that the formulas are growing.

In C and E, subject to the [same] applicability of... is wordy, awkward, and imprecise; furthermore, are is preferable to either before or after established big businesses to complete the comparison.
Finally, the referent of they is not immediately clear in E.


I did not understand how and why are is important as indicated in OE above in option C. Can someone explain C in terms of comparison only.
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Re: Formulas for cash flow and the ratio of debt to equity do [#permalink]

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New post 26 Nov 2015, 13:30
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The point about "are" is that C says that small businesses "are not subject to the same XYZ as big businesses." It would be helpful to provide an "are" to complete the comparison: "small businesses are not subject to the same XYZ as are big businesses."

In a simple sentence, we don't need this clarification:

I'm not as strong as you.

But in a sentence with even a slight bit more complexity, that verb can make a big difference. Compare these:

I'm more interested in economics than you.
I'm more interested in economics than you are.


We would probably figure out the intended meaning in the first case (especially if we consider ourselves more interesting than economics), but the second is clearer.

Now look at a sentence with a more involved second half:

The singer is less excited about the concert than the legions of fans seeking her autograph.

This sentence is truly ambiguous. Is she more excited about the fans than about the concert (notice my second "about" to make that clear), or are the fans more excited about the concert than she is? Let's rewrite to indicate the former meaning and then the latter:

The singer is less excited about the concert than about the legions of fans seeking her autograph.
The singer is less excited about the concert than are the legions of fans seeking her autograph.

Here, we put the "are" before that long noun phrase at the end just to make it easier to catch. We could technically put it at the end, but it would be less useful there--by the end, either you've interpreted the meaning correctly or you haven't, and so it's better to make the intended meaning clear sooner.
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Re: Formulas for cash flow and the ratio of debt to equity do   [#permalink] 26 Nov 2015, 13:30
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