Last year Company X experienced an unexpectedly steep drop

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CEO

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Last year Company X experienced an unexpectedly steep drop [#permalink]

31 Dec 2003, 14:34

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Last year Company X experienced an unexpectedly steep drop 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 its losses.

The argument above assumes that

the amount saved in payroll expenditures will exceed the amount lost in profits
the amount saved in payroll expenditures will equal the amount lost in profits
reducing Company X's workforce will not cause the company to lose productivity
Company X has no reserve funds that it could use to offset its losses
Company X has not at some time in the past reduced its workforce

Senior Manager

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31 Dec 2003, 14:54

Go with C.

Your JR is distracting me... :wink:

CEO

Joined: 15 Aug 2003

Posts: 3550

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Kudos [?]: 626 [0], given: 781

[#permalink]

31 Dec 2003, 14:59

asandeep wrote:

Go with C.

Your JR is distracting me... :wink:

explain please

isnt C out of scope?

i picked A

Senior Manager

Joined: 29 Aug 2003

Posts: 327

Location: MI

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[#permalink]

31 Dec 2003, 15:05

praetorian123 wrote:

asandeep wrote:

Go with C.

Your JR is distracting me... :wink:

explain please

isnt C out of scope?

i picked A

The argument does not depend on the fact that payroll savings will exceed or equal the losses.
Even if the savings do not equal or exceed they will still allow the company to "save a great deal" in payroll expenses.

If C is negated, then the reduction in workforce pushes the company further in losses and thus the argument falls apart.

Agree ?

CEO

Joined: 15 Aug 2003

Posts: 3550

Followers: 55

Kudos [?]: 626 [0], given: 781

[#permalink]

31 Dec 2003, 15:25

asandeep wrote:

praetorian123 wrote:

asandeep wrote:

Go with C.

Your JR is distracting me... :wink:

explain please

isnt C out of scope?

i picked A

C is the correct answer

[#permalink] 31 Dec 2003, 15:25

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Last year Company X experienced an unexpectedly steep drop

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