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In order to finance road repairs, the highway commision of a

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In order to finance road repairs, the highway commision of a [#permalink] New post 12 Jun 2006, 09:30
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In order to finance road repairs, the highway commision of a certain state is considering a 50 percent increase in the 10-cents-per-mile toll for vehicles using its toll highway. The highway commissioner claims that the toll increase will increase the annual revenue generated by the toll highway by atleast 50 percent per year.

Which of the following is an assumption on which the highway commisioner's claim depends?

(A) The amount of money required annually for road repairs will not increase from its current level.
(B) The total number of trips made on the toll highway per year will not decrease from its current level.
(C) The average length of the trip made on the toll highway will not decrease from its current level.
(D) The number of drivers who consistently avoid the highway tolls by using secondary roads will not increase from its current level.
(E) The total distance traveled by vehicles on the toll highway per year will not decrease from its current level.

Please explain.

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Brajesh
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Re: CR - Toll Highway [#permalink] New post 12 Jun 2006, 12:27
go with E on this one.
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Re: CR - Toll Highway [#permalink] New post 12 Jun 2006, 12:56
b14kumar wrote:
In order to finance road repairs, the highway commision of a certain state is considering a 50 percent increase in the 10-cents-per-mile toll for vehicles using its toll highway. The highway commissioner claims that the toll increase will increase the annual revenue generated by the toll highway by atleast 50 percent per year.

Which of the following is an assumption on which the highway commisioner's claim depends?

(A) The amount of money required annually for road repairs will not increase from its current level.
(B) The total number of trips made on the toll highway per year will not decrease from its current level.
(C) The average length of the trip made on the toll highway will not decrease from its current level.
(D) The number of drivers who consistently avoid the highway tolls by using secondary roads will not increase from its current level.
(E) The total distance traveled by vehicles on the toll highway per year will not decrease from its current level.

Please explain.

Regards,
Brajesh


Agree with Professor E it is.

Since the plan depends on a per mile charge it is assumed that the total distance travelled will not change.
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 [#permalink] New post 12 Jun 2006, 14:23
I'm btween D & E. Choose E
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 [#permalink] New post 12 Jun 2006, 14:24
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Re: CR - Toll Highway [#permalink] New post 12 Jun 2006, 15:16
^ E ^


The commisioner's claim is "the toll increase will increase the annual revenue generated by the toll highway by atleast 50 percent per year". >> So, A and D are out of the scope we are dealing with.

>> B is out because we are talking about the 10-cents-per-mile toll. The number of trips made on the toll highway per year may decrease but the total distance may get much more longer. So, this assumption would not help us.

>> C is out because we are not talking about "The average length of the trip " but "the total distance traveled by vehicles on the toll highway per year ".

E stands ..
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 [#permalink] New post 12 Jun 2006, 16:32
We are talking about revenue here and not the net profit...

a 50% increase in toll charges will directly increase the total revenues

when the total distance travelled by all the vehicles in a year doesn't decrease from the current level.

As already discussed, A & D is not in the race...

'B' - counts the number of trips. but ingnores the actual distance (usage of the highway in terms of distance travelled)

'C' - provides average figures. Which is not used to calculate total revenues earned moreover unlike 'D' & 'E' doesn't use 'per year'

So E is the clear winner.
  [#permalink] 12 Jun 2006, 16:32
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