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Last year Company X experienced an unexpectedly steep drop

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CEO
CEO
Joined: 15 Aug 2003
Posts: 3470
Followers: 57

Kudos [?]: 649 [0], given: 781

Last year Company X experienced an unexpectedly steep drop [#permalink] New post 31 Dec 2003, 13:34
00:00
A
B
C
D
E

Difficulty:

  5% (low)

Question Stats:

100% (01:53) correct 0% (00:00) wrong based on 1 sessions
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
Manager
Manager
User avatar
Joined: 29 Aug 2003
Posts: 246
Location: MI
Followers: 1

Kudos [?]: 2 [0], given: 0

GMAT Tests User
 [#permalink] New post 31 Dec 2003, 13:54
Go with C.

Your JR is distracting me... :wink:
CEO
CEO
Joined: 15 Aug 2003
Posts: 3470
Followers: 57

Kudos [?]: 649 [0], given: 781

 [#permalink] New post 31 Dec 2003, 13:59
asandeep wrote:
Go with C.

Your JR is distracting me... :wink:


explain please

isnt C out of scope?

i picked A
Manager
Manager
User avatar
Joined: 29 Aug 2003
Posts: 246
Location: MI
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Kudos [?]: 2 [0], given: 0

GMAT Tests User
 [#permalink] New post 31 Dec 2003, 14:05
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 ?
  [#permalink] 31 Dec 2003, 14:05
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