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The Hale Burton Oil Pipeline Construction Corporation has

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The Hale Burton Oil Pipeline Construction Corporation has [#permalink] New post 12 Apr 2013, 03:44
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C
D
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Question Stats:

84% (02:11) correct 16% (01:49) wrong based on 94 sessions
The Hale Burton Oil Pipeline Construction Corporation has had a bad quarter. Rather than lay off workers to cut costs, however, it will simply defer salaries for 30 days and hold them in a mutual fund to pick up interest to cover expenses. By doing this the company and its employees will avoid the negative consequences often associated with earning shortfalls.

Which of the following, if true, is the best criticism of the corporation,Aos plan?
A. Employees will not be able to control which mutual funds the salaries will be diverted into.
B. The corporation cannot save money by cutting staff because it is already understaffed.
C. Some employees will need to borrow money to hold them over until the 30 days are up and they will consequently have 30 days of interest on these loans.
D. Some employees will not be affected by the rollover because they have savings.
E. The corporation's budget was cut by 15% last year.

Please give your line of reasoning, thanks!
[Reveal] Spoiler: OA
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Re: A weakening question [#permalink] New post 12 Apr 2013, 04:28
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The Hale Burton Oil Pipeline Construction Corporation has had a bad quarter. Rather than lay off workers to cut costs, however, it will simply defer salaries for 30 days and hold them in a mutual fund to pick up interest to cover expenses.
FACTS
By doing this the company and its employees will avoid the negative consequences often associated with earning shortfalls.
Conclusion

Which of the following, if true, is the best criticism of the corporation,Aos plan?
We have to look for an answer that shows that: despite the plan, employees will experience "negative consequences".

A. Employees will not be able to control which mutual funds the salaries will be diverted into.
This doesn't mean any "negative consequences".
B. The corporation cannot save money by cutting staff because it is already understaffed.
Again, no "negative consequences" can be deducted from this.
C. Some employees will need to borrow money to hold them over until the 30 days are up and they will consequently have 30 days of interest on these loans.
Correct. 30 days of interests are a bad consequence for the employees.
D. Some employees will not be affected by the rollover because they have savings.
No "negative consequences" here.
E. The corporation's budget was cut by 15% last year.
This is a fact that doesn't affect the conclusion.
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Re: A weakening question [#permalink] New post 12 Apr 2013, 10:55
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sandra1122 wrote:
The Hale Burton Oil Pipeline Construction Corporation has had a bad quarter. Rather than lay off workers to cut costs, however, it will simply defer salaries for 30 days and hold them in a mutual fund to pick up interest to cover expenses. By doing this the company and its employees will avoid the negative consequences often associated with earning shortfalls.

Which of the following, if true, is the best criticism of the corporation,Aos plan?
A. Employees will not be able to control which mutual funds the salaries will be diverted into.
B. The corporation cannot save money by cutting staff because it is already understaffed.
C. Some employees will need to borrow money to hold them over until the 30 days are up and they will consequently have 30 days of interest on these loans.
D. Some employees will not be affected by the rollover because they have savings.
E. The corporation's budget was cut by 15% last year.

Please give your line of reasoning, thanks!


Hi
This is a question that deals with plan and its effect.
the plan here is to bridge the earning shortfall by investing the salary in mutual funds.
option C: States that Some employees will borrow. this borrowing will have an interest, hence it casts doubt on the objective of the plan....they may earn a little of profit but that can be negated by the interest of another loan.

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Re: A weakening question [#permalink] New post 13 Apr 2013, 04:25
I didn't realize at first that borrowing generates interest, I though the interest was earned...
Thanks guys.
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Re: The Hale Burton Oil Pipeline Construction Corporation has [#permalink] New post 30 Jun 2014, 07:21
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
Re: The Hale Burton Oil Pipeline Construction Corporation has   [#permalink] 30 Jun 2014, 07:21
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