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A united states manufacturer of farm equipment reported a 1988 third-quarter net income of $32 million, compared with $25.5 million in the third quarter of 1987. This increase was realized despite a drop in US retail sales of farm equipment toward the end of the third quarter of 1988 as a result of a drought.
Which of the following, if true, wud ci=ontribute most to an explanation of the increase in the manufacturer's net income?
(A)During the third quarter of 1988, the manufacturer announced that it wud add irrigation systems to its line of products.
(B)In the third quarter of 1988, the manufacturer paid no wages during a six-week stirke, but stocks on hand wre adequate to supply dealers.
(C)Sales in the US of farm equipment made and sold by foreign companies werre higher in the third quarter of 1988 than in any previous quarter.
(D)Official dealers of the manufacture had low supplies of farm equipment during the third quarter of 1988.
(E)Eligible US farmers benefited from a federal drought-relief fund late in the third quarter of 1988.
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Director
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It should be "A"
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Conclusion: This increase was realized despite a drop in US retail sales of farm equipment toward the end of the third quarter of 1988 as a result of a drought.
(A)During the third quarter of 1988, the manufacturer announced that it wud add irrigation systems to its line of products. [But as per the conclusion, this choice will not help – third quarter, there is decline in sales]
(B)In the third quarter of 1988, the manufacturer paid no wages during a six-week stirke, but stocks on hand wre adequate to supply dealers. [ This may help in increase in net income]
(C)Sales in the US of farm equipment made and sold by foreign companies werre higher in the third quarter of 1988 than in any previous quarter. [Irrelevant]
(D)Official dealers of the manufacture had low supplies of farm equipment during the third quarter of 1988. [Irrelevant]
(E)Eligible US farmers benefited from a federal drought-relief fund late in the third quarter of 1988. [Irrelevant]
Answer: B
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blog wrote: A united states manufacturer of farm equipment reported a 1988 third-quarter net income of $32 million, compared with $25.5 million in the third quarter of 1987. This increase was realized despite a drop in US retail sales of farm equipment toward the end of the third quarter of 1988 as a result of a drought.
Which of the following, if true, wud ci=ontribute most to an explanation of the increase in the manufacturer's net income?
(A)During the third quarter of 1988, the manufacturer announced that it wud add irrigation systems to its line of products.
(B)In the third quarter of 1988, the manufacturer paid no wages during a six-week stirke, but stocks on hand wre adequate to supply dealers.
(C)Sales in the US of farm equipment made and sold by foreign companies werre higher in the third quarter of 1988 than in any previous quarter.
(D)Official dealers of the manufacture had low supplies of farm equipment during the third quarter of 1988.
(E)Eligible US farmers benefited from a federal drought-relief fund late in the third quarter of 1988. Since the supply was short in 3rd quarter of 1988 prices must have gone up and so must have sales...revenues must have increased owing to price effect...so D
Last edited by rafiaiqbal on 24 Jan 2008, 12:57, edited 3 times in total.
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Manager
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blog wrote: A united states manufacturer of farm equipment reported a 1988 third-quarter net income of $32 million, compared with $25.5 million in the third quarter of 1987. This increase was realized despite a drop in US retail sales of farm equipment toward the end of the third quarter of 1988 as a result of a drought.
Which of the following, if true, wud ci=ontribute most to an explanation of the increase in the manufacturer's net income?
(A)During the third quarter of 1988, the manufacturer announced that it wud add irrigation systems to its line of products.
(B)In the third quarter of 1988, the manufacturer paid no wages during a six-week stirke, but stocks on hand wre adequate to supply dealers.
(C)Sales in the US of farm equipment made and sold by foreign companies werre higher in the third quarter of 1988 than in any previous quarter.
(D)Official dealers of the manufacture had low supplies of farm equipment during the third quarter of 1988.
(E)Eligible US farmers benefited from a federal drought-relief fund late in the third quarter of 1988. Since the supply was short in 3rd quarter of 1988 prices must have gone up and so must have sales...revenues must have increased owing to price effect...so D
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Manager
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What is the OA?
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Manager
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IMO B.
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Manager
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bhatia_ash2002 wrote: What is the OA? i dont have ans for this .
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Manager
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What is the source of all these questions blog? My answer is B blog wrote: bhatia_ash2002 wrote: What is the OA? i dont have ans for this . |
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Senior Manager
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Well I suggest there is no point in posting an argument whose logic cannot be corroborated. It is frustrating to realize after coming at an answer, that it cannot be verified.
_________________
-Underline your question. It takes only a few seconds!
-Search before you post.
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Manager
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JCLEONES wrote: What is the source of all these questions blog?
i have some test paper with me so i was trying to solve it . i didnt know first that it didnt have answer in it. sorry.
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FYI, OA is B. 
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blog wrote: A united states manufacturer of farm equipment reported a 1988 third-quarter net income of $32 million, compared with $25.5 million in the third quarter of 1987. This increase was realized despite a drop in US retail sales of farm equipment toward the end of the third quarter of 1988 as a result of a drought.
Which of the following, if true, wud ci=ontribute most to an explanation of the increase in the manufacturer's net income?
(A)During the third quarter of 1988, the manufacturer announced that it wud add irrigation systems to its line of products.
(B)In the third quarter of 1988, the manufacturer paid no wages during a six-week stirke, but stocks on hand wre adequate to supply dealers.
(C)Sales in the US of farm equipment made and sold by foreign companies werre higher in the third quarter of 1988 than in any previous quarter.
(D)Official dealers of the manufacture had low supplies of farm equipment during the third quarter of 1988.
(E)Eligible US farmers benefited from a federal drought-relief fund late in the third quarter of 1988. the only problem with B for me is that not paying wages does not neccesarily mean the company will not accrue them. in light of this, i think D is equally ambigious (low inventories usually lead to a greater demand; e.g. US DOE tells the world every week how much crude they have, and this seriously impacts wti/brent qoutes). i think the language should be improved in this question.
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