Recent audits revealed that BanqueCard, a credit service, : GMAT Critical Reasoning (CR)
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# Recent audits revealed that BanqueCard, a credit service,

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Senior Manager
Joined: 19 Feb 2004
Posts: 414
Location: Lungi
Followers: 1

Kudos [?]: 30 [0], given: 0

Recent audits revealed that BanqueCard, a credit service, [#permalink]

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19 Apr 2004, 00:09
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6. Recent audits revealed that BanqueCard, a credit
service, has erred in calculating the interest it charges
its clients. But BanqueCard's chief accountant
reasoned that the profits that the company shows
would remain unaffected by a revision of its clientsтАЩ,
credit statements to correct its previous billing
errors, since just as many clients had been overcharged
as undercharged.

Which of the following is a reasoning error that the
accountant makes in concluding that correcting its
clients' statements would leave BanqueCard's profits
unaffected?
(A) Relying on the reputation of BanqueCard as a
trustworthy credit service to maintain the
company's clientele after the error becomes
widely known
(B) Failing to establish that BanqueCard charges
the same rates of interest for all of its clients
(C) Overlooking the possibility that the amount by
which BanqueCard's clients had been over-
charged might be greater than the amount by
(D) Assuming that the clients who had been over-
charged by BanqueCard had not noticed the
error in their credit bills
(E) Presupposing that each one of BanqueCard's
clients had either been overcharged or else
had been undercharged by the billing error

7. Not Scored
If you have any questions
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Joined: 30 Oct 2003
Posts: 1793
Location: NewJersey USA
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19 Apr 2004, 06:44
B and C are the contenders. C is good because as per B even if interest rate are different the total amount in error could be different or same depending on how much the peple spent.
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