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Director
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Last year company X experienced an unexpected steep drops in [#permalink]
 08 Jul 2007, 22:28
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Last year company X experienced an unexpected steep drops in profits.To offset this loss,company X should reduce its workforce by 10%.Doing so will allow the company to save a great deal in payroll expenditures.Company X will therefore be able to recoup the losses.
The argument above assumes that
A. The amount saved in payroll expenditures will exceed the amount lost in profits.
B. The amount saved in payroll expenditures will equal the amount lost in profits.
C. Reducing Company X's workforce will not cause the company to reduce productivity.
D. Company X has no reserve funds to offset its losses.
E. Company X has not at sometime in the past reduced its workforce.
Please give reasons for ur choices...
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Manager
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I would go for A.
They are talking about recouping losses from profits through cuts in payroll expenditures. Hence A.
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GMAT Club Legend
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I'll go for B. Recoup means 'to get an equivalent of'.
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Director
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I will go with C. Although i should say its a brave choice.
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Director
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I think it's C.
Company is assuming that cut in resources will not hamper the productivity and hence it will make same profit but with less expenditure.
Regards,
Brajesh
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Senior Manager
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Re: CR - Workforce [#permalink]
09 Jul 2007, 14:29
vineetgupta wrote: Last year company X experienced an unexpected steep drops in profits.To offset this loss,company X should reduce its workforce by 10%.Doing so will allow the company to save a great deal in payroll expenditures.Company X will therefore be able to recoup the losses.
The argument above assumes that
A. The amount saved in payroll expenditures will exceed the amount lost in profits.
B. The amount saved in payroll expenditures will equal the amount lost in profits.
C. Reducing Company X's workforce will not cause the company to reduce productivity.
D. Company X has no reserve funds to offset its losses.
E. Company X has not at sometime in the past reduced its workforce.
Please give reasons for ur choices...
The passage doesn't talk abt productivity. It talks about making up losses. So, it's between A and B. You can't be certain that the savings will be more than the amount of money lost. But certainly, the savings will be equal to the amount lost in profits. Hence B.
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Director
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Re: CR - Workforce [#permalink]
09 Jul 2007, 18:03
shoonya wrote: vineetgupta wrote: Last year company X experienced an unexpected steep drops in profits.To offset this loss,company X should reduce its workforce by 10%.Doing so will allow the company to save a great deal in payroll expenditures.Company X will therefore be able to recoup the losses.
The argument above assumes that
A. The amount saved in payroll expenditures will exceed the amount lost in profits.
B. The amount saved in payroll expenditures will equal the amount lost in profits.
C. Reducing Company X's workforce will not cause the company to reduce productivity.
D. Company X has no reserve funds to offset its losses.
E. Company X has not at sometime in the past reduced its workforce.
Please give reasons for ur choices... The passage doesn't talk abt productivity. It talks about making up losses. So, it's between A and B. You can't be certain that the savings will be more than the amount of money lost. But certainly, the savings will be equal to the amount lost in profits. Hence B. This is exactly the point I had in mind when I picked B but OA is given as C.But C looks out of scope to me...any thoughts??
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Senior Manager
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C? Damn!
I tossed out C on my first skim because of the scope issue.
I would pick A though. It passes the negate test.
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Senior Manager
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Re: CR - Workforce [#permalink]
09 Jul 2007, 20:11
vineetgupta wrote: shoonya wrote: vineetgupta wrote: Last year company X experienced an unexpected steep drops in profits.To offset this loss,company X should reduce its workforce by 10%.Doing so will allow the company to save a great deal in payroll expenditures.Company X will therefore be able to recoup the losses.
The argument above assumes that
A. The amount saved in payroll expenditures will exceed the amount lost in profits.
B. The amount saved in payroll expenditures will equal the amount lost in profits.
C. Reducing Company X's workforce will not cause the company to reduce productivity.
D. Company X has no reserve funds to offset its losses.
E. Company X has not at sometime in the past reduced its workforce.
Please give reasons for ur choices... The passage doesn't talk abt productivity. It talks about making up losses. So, it's between A and B. You can't be certain that the savings will be more than the amount of money lost. But certainly, the savings will be equal to the amount lost in profits. Hence B. This is exactly the point I had in mind when I picked B but OA is given as C.But C looks out of scope to me...any thoughts?? Vineet, what's the source of this question?
_________________
for every person who doesn't try because he is
afraid of loosing , there is another person who
keeps making mistakes and succeeds..
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Director
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Re: CR - Workforce [#permalink]
09 Jul 2007, 21:01
shoonya wrote: vineetgupta wrote: Last year company X experienced an unexpected steep drops in profits.To offset this loss,company X should reduce its workforce by 10%.Doing so will allow the company to save a great deal in payroll expenditures.Company X will therefore be able to recoup the losses.
The argument above assumes that
A. The amount saved in payroll expenditures will exceed the amount lost in profits.
B. The amount saved in payroll expenditures will equal the amount lost in profits.
C. Reducing Company X's workforce will not cause the company to reduce productivity.
D. Company X has no reserve funds to offset its losses.
E. Company X has not at sometime in the past reduced its workforce.
Please give reasons for ur choices... The passage doesn't talk abt productivity. It talks about making up losses. So, it's between A and B. You can't be certain that the savings will be more than the amount of money lost. But certainly, the savings will be equal to the amount lost in profits. Hence B. i like your reasoning..
B too........
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Intern
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I am with C too.
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Manager
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should be C only because if productivity decreases, again there will be losses after this payrol cut
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Intern
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I Believe C is correct
I initlally picked A but C really makes more sense
if A is fine then B should also be fine ...because here we are not talking about making profits again.... we are just talking about recovering the loses
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Senior Manager
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It's not C
C is out of scope
It is B..
The argument is the decrease in workforce will allow the company to recoup the previous year's loss of 10% profits
Hence, in order for that to occur, B needs to be true or else it WONT recoup the profits
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Manager
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jamesrwrightiii wrote: It's not C
C is out of scope
It is B..
The argument is the decrease in workforce will allow the company to recoup the previous year's loss of 10% profits
Hence, in order for that to occur, B needs to be true or else it WONT recoup the profits
B can't be right, recoup does not mean that it will be the exact/equal amount... the amount could also exceed the loss... that just doesn't make sense. and that's why both A and B are out
yes, C is a bit far but it is still the only good choice... (as mentioned above)
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