Note that pronouns in possessive forms can refer to possessive nouns.
In this sentence -
"The results of the company’s
cost-cutting measures are evident in its
"its" can refer to "company's". However, we cannot use the pronoun "it" to refer to "company's".
Option A - Incorrect.
the usage of "it" is incorrect as it cannot refer to the possessive noun "company's".
Option B - Incorrect.
the usage of pronoun "it" is incorrect.
"which had increased
during the first three months of the year ..." - the usage of past perfect is incorrect. We can either use the simple past or present perfect.
Option C - Correct Answer.
"which have increased
5 percent during the fi rst 3 months of this year after falling over the last two years.
both the things in bold refer to "profits".
Also, note the usage of present perfect - "have increased". this implies that the statement was made at the end of the three month period.
the usage of past tense "increased" implies that the statement was made After the end of the three month period.
Option D - Incorrect.
Note that prepositional phrases generally serve as adverbial modifiers.
In this case, "with a 5 percent increase during the first 3 months ..." seems to describe How "the results of the company's cost cutting measures Are evident ..."
WHEREAS "a 5 percent increase" and "after falling" should clearly refer to "profits".
Hence, we need a noun-modifier such as "which".
Option E - Incorrect.
Same error as D.
Also, note that "after + having fallen" is redundant.
"having + past participle" already describes a prior action in a sequence of events.
For example -
the movie, I went
to the restaurant.
Here, "watched" happened before "went".
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