Find all School-related info fast with the new School-Specific MBA Forum

It is currently 26 Jul 2014, 11:48

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

To avoid a hostile takeover attempt, the board of directors

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
VP
VP
avatar
Joined: 21 Mar 2006
Posts: 1136
Location: Bangalore
Followers: 2

Kudos [?]: 19 [0], given: 0

GMAT Tests User
To avoid a hostile takeover attempt, the board of directors [#permalink] New post 06 Oct 2006, 21:06
00:00
A
B
C
D
E

Difficulty:

(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions
To avoid a hostile takeover attempt, the board of directors of Wellco, Inc., a provider of life and health insurance, planned to take out large loans and use them to purchase a publishing company, a chocolate factory, and a nationwide chain of movie theaters. The directors anticipated that these purchase initially would plunge the corporation deep into debt, rendering it unattractive to those who wanted to take it over, but that steadily rising insurance rates would allow the company to pay off the debt within five years. Meanwhile, revenues from the three new businesses would enable the corporation as a whole to continue to meet its increased operating expenses. Ultimately, according o the directors’ plan, the diversification would strengthen the corporation by varying the sources and schedules of its annual revenues.
Which of the following, assuming that all are equally possible, would most enhance the chances of the plan’s success?
(A) A widespread drought decreases the availability of cacao beans, from which chocolate is manufacture, diving up chocolate prices worldwide.
(B) New government regulations require a 30 percent across-the-board rate rollback of all insurance companies, to begin immediately and to be completed within a five-year period.
(C) Congress enacts a statute, effective after six months, making it illegal for any parent not to carry health insurance coverage for his or her child.
(D) Large-screen televisions drop dramatically in price due to surprise alterations in trade barriers with Japan; movie theater attendance dwindles as a consequence.
(E) A new, inexpensive process is discovered for making paper pulp, and paper prices fall to 60 percent of their former level.
Senior Manager
Senior Manager
User avatar
Joined: 13 Jul 2006
Posts: 327
Followers: 1

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

GMAT Tests User
Re: CR1000 - Wellco Inc. [#permalink] New post 06 Oct 2006, 22:15
kripalkavi wrote:
To avoid a hostile takeover attempt, the board of directors of Wellco, Inc., a provider of life and health insurance, planned to take out large loans and use them to purchase a publishing company, a chocolate factory, and a nationwide chain of movie theaters. The directors anticipated that these purchase initially would plunge the corporation deep into debt, rendering it unattractive to those who wanted to take it over, but that steadily rising insurance rates would allow the company to pay off the debt within five years. Meanwhile, revenues from the three new businesses would enable the corporation as a whole to continue to meet its increased operating expenses. Ultimately, according o the directors’ plan, the diversification would strengthen the corporation by varying the sources and schedules of its annual revenues.
Which of the following, assuming that all are equally possible, would most enhance the chances of the plan’s success?
(A) A widespread drought decreases the availability of cacao beans, from which chocolate is manufacture, diving up chocolate prices worldwide.
(B) New government regulations require a 30 percent across-the-board rate rollback of all insurance companies, to begin immediately and to be completed within a five-year period.
(C) Congress enacts a statute, effective after six months, making it illegal for any parent not to carry health insurance coverage for his or her child.
(D) Large-screen televisions drop dramatically in price due to surprise alterations in trade barriers with Japan; movie theater attendance dwindles as a consequence.
(E) A new, inexpensive process is discovered for making paper pulp, and paper prices fall to 60 percent of their former level.




Kripal question been discussed before.Chk the archives.
I think its (C).The whole plan hinges on whether the debt can be paid back.if the statute is passed,the insurance will be able to pay back the debt.
_________________

A well-balanced person is one who has a drink in each of his hands.

VP
VP
User avatar
Joined: 21 Aug 2006
Posts: 1026
Followers: 1

Kudos [?]: 17 [0], given: 0

GMAT Tests User
 [#permalink] New post 06 Oct 2006, 22:56
yeah...C is my choice too...the success of plan depends on the ability of the company to pay-off the debt.
_________________

The path is long, but self-surrender makes it short;
the way is difficult, but perfect trust makes it easy.

VP
VP
avatar
Joined: 21 Mar 2006
Posts: 1136
Location: Bangalore
Followers: 2

Kudos [?]: 19 [0], given: 0

GMAT Tests User
 [#permalink] New post 06 Oct 2006, 23:14
thanks sangarelli. Will check the archives.
Director
Director
avatar
Joined: 18 Jul 2006
Posts: 532
Followers: 1

Kudos [?]: 22 [0], given: 0

GMAT Tests User
 [#permalink] New post 07 Oct 2006, 00:46
Easy C.
All other choices would clearly hurt company's plans.
Current Student
User avatar
Joined: 29 Jan 2005
Posts: 5253
Followers: 23

Kudos [?]: 120 [0], given: 0

GMAT Tests User Reviews Badge
 [#permalink] New post 07 Oct 2006, 03:03
The difficult hurdle in this CR is the sheer volume of info that one has to read through in under two minutes. Otherwise, the answer choices presented really aren't too challenging.
VP
VP
User avatar
Joined: 25 Jun 2006
Posts: 1176
Followers: 2

Kudos [?]: 31 [0], given: 0

GMAT Tests User
 [#permalink] New post 09 Oct 2006, 03:50
C 2
  [#permalink] 09 Oct 2006, 03:50
    Similar topics Author Replies Last post
Similar
Topics:
To avoid a hostile takeover attempt, the board of directors AK47 6 17 Jan 2007, 08:32
To avoid a hostile takeover attempt, the board of directors sperinko 11 06 Aug 2006, 07:35
To avoid a hostile takeover attempt, the board of directors rahulraao 13 19 Sep 2005, 02:39
To avoid a hostile takeover attempt, the board of directors ywilfred 11 07 Sep 2005, 06:03
To avoid a hostile takeover attempt, the board of directors DLMD 9 16 Feb 2005, 11:30
Display posts from previous: Sort by

To avoid a hostile takeover attempt, the board of directors

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.