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Which of the following most logically completes the passage?

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Which of the following most logically completes the passage? [#permalink] New post 30 Oct 2012, 06:29
00:00
A
B
C
D
E

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Question Stats:

73% (01:56) correct 27% (02:41) wrong based on 43 sessions
Which of the following most logically completes the passage?

California levies its real-estate tax as a percentage of a property's assessed value. California reassessed
all properties late last year, ensuring that this year's real-estate tax on a given property fairly reflects that
property's current value. By comparison with the previous assessment 3 years ago, the mean assessed
property value was considerably lower. Nonetheless, the mean real-estate tax bill sent to California’s
property owners this year is likely to be no lower than last year's, because __________.

A. the assessed value of relatively modest properties in California went down more, on average, than that of
more valuable properties
B. actual selling prices of properties sold in California so far this year have been higher, on average, than assessed values
C. a likely consequence of declining real-estate values in California will be a general slow-down in the local economy
D. there have been many real-estate transactions over the last year, and many current property owners did
not own California property a year ago
E. the real-estate tax rate in California has not been set for this year, but will probably be higher than last year's rate

Please support your answers with explanations
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Re: California levies its real-estate tax [#permalink] New post 30 Oct 2012, 08:38
Answer should be E.

edit : Answer is as everyone else has pointed out E. I overlooked the first sentence. :(

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Last edited by MacFauz on 30 Oct 2012, 20:29, edited 1 time in total.
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Re: California levies its real-estate tax [#permalink] New post 30 Oct 2012, 10:10
B or E...go for B..

E because..rate will probably higher than last year rate..

B because ..sales value increase..

tooo tough question for me..
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Re: California levies its real-estate tax [#permalink] New post 30 Oct 2012, 11:03
gmatbull wrote:
Which of the following most logically completes the passage?

California levies its real-estate tax as a percentage of a property's assessed value. California reassessed
all properties late last year, ensuring that this year's real-estate tax on a given property fairly reflects that
property's current value. By comparison with the previous assessment 3 years ago, the mean assessed
property value was considerably lower. Nonetheless, the mean real-estate tax bill sent to California’s
property owners this year is likely to be no lower than last year's, because __________.

A. the assessed value of relatively modest properties in California went down more, on average, than that of
more valuable properties
B. actual selling prices of properties sold in California so far this year have been higher, on average, than assessed values
C. a likely consequence of declining real-estate values in California will be a general slow-down in the local economy
D. there have been many real-estate transactions over the last year, and many current property owners did
not own California property a year ago
E. the real-estate tax rate in California has not been set for this year, but will probably be higher than last year's rate

Please support your answers with explanations


Tought between B and E but I chose E over B.

My observations:
Last sentence in text says that tax "IS LIKELY" to be no lower ...
Answer E says "PROBABLY" tax will be higher.

My doubts about B are a bit dubious but at least more than they are for E:
1. "Selling price' as mentioned in B may be assumed as a cause for the higher tax but is not mentioned in the text.
2. I don't think "selling price" is a factor that supports the text, which states "...real-estate tax as a percentage of a property's assessed value". This makes me think that regardless of the [high or low] selling price, assessed value of land is different.
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Re: California levies its real-estate tax [#permalink] New post 30 Oct 2012, 11:34
Expert's post
Going with the flow of the question, E seems preferable over others in that it quite explicitly mentions the reason even though the rates are not assessed, the bills are likely to be higher.
When choosing B, we have to make an assumption that the seller must sell its property at the assessed value.
Was stuck over D for sometime, but no way we can infer info that even if many transactions took place last year, the property tax will be higher this year.
+1 E.
What's OA, OE and source?
Nice question though.
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Re: California levies its real-estate tax [#permalink] New post 31 Oct 2012, 01:06
OA is
[Reveal] Spoiler:
E


Can we make a proper analysis of our own- especially with reference to this quote?
By comparison with the previous assessment 3 years ago, the mean assessed
property value was considerably lower. Nonetheless, the mean real-estate tax bill sent to California’s
property owners this year is likely to be no lower than last year's, because __________.
OE not available....Thanks.
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Re: California levies its real-estate tax [#permalink] New post 31 Oct 2012, 01:43
gmatbull wrote:
OA is
[Reveal] Spoiler:
E


Can we make a proper analysis of our own- especially with reference to this quote?
By comparison with the previous assessment 3 years ago, the mean assessed
property value was considerably lower. Nonetheless, the mean real-estate tax bill sent to California’s
property owners this year is likely to be no lower than last year's, because __________.
OE not available....Thanks.


The only real viable options are B and E. But the first sentence clearly says that taxes are levied only on the basis of the assessed values. So selling price is immaterial. Option E clearly provides an explanation of how the tax bill would remain the same even though the assessed values had decreased.

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Re: California levies its real-estate tax [#permalink] New post 31 Oct 2012, 10:32
I now understand the meaning of the statement below:
Mean real-estate tax bill is not likely to be lower than last year's because the
real-estate tax rate has not been set for this year, and will probably be higher than last yr's.

You cannot determine the tax bill without first knowing what assessed rate to use; Is that correct?
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Re: Which of the following most logically completes the passage? [#permalink] New post 07 Nov 2012, 23:54
Given:
Properties assessed last year.
Mean Assessed value 3 years ago > Mean Assessed value a year ago => Assessed values are declining
Mean real estate tax bill this year >= Mean real estate tax bill last year


To make Mean real estate bill at least equal to last years', the tax rate has to be increased if not done already.

Choice A - Cannot be determined for sure with the information given
Choice B and C are out of scope
Choice D is irrelevant to the current context

Choice E is the right choice.


Hope this helps
Re: Which of the following most logically completes the passage?   [#permalink] 07 Nov 2012, 23:54
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