I am not going to debate anything, (at this time at least) will just add a few interesting facts that may explain why the cost is high (not justify, just explain)
GMAT is taken about 250K times per year. That's $62.5 million dollars in revenue. Take 3-5% off that off for banking and processing fees.
1. Creating questions is expensive. I have heard from one source that one GMAT question costs upwards of $1K. I doubt the cost is that high but probably not small either since to license GRE questions, it costs $225 - 450 per question. (Strangely enough, it is only $5-10 to license an entire LSAT test). Go figure... But let's assume it does cost them $250-500 per question. If a CAT test requires 7.5 times the number of questions, that means you will need 585 questions per month; that's $125-250K per month to run the testing (potentially). This is just guessing. Annual cost is 2-3 million. Assuming More questions are needed for a CAT and a higher question price, this could be close to $12MM.
2. Test Center rental
The test runs for 3.5 hours and only 2-3 people can take the test per day, so probably it cost $50 per test for rental/space, etc
3. Administrative cost
- Office Rental in McLean, VA (DC area - pretty expensive)
I used to know this but don't remember the number of employees GMAC has. I thought it was close to 100
From GMAC's website about working at GMAC, I would assume this is the highest cost.
[quote2GMAC:]GMAC offers a superb work environment
•A collaborative, goal-oriented, diverse, and fun-loving culture
•Highly competitive compensation
•A truly exceptional benefits package
•Work life balance[/quote2]
There are also costs of technology/website/administration/etc. This is probably small compared to the above
Bottom line - GMAC is a non-profit, so they are supposed to spend all they receive and it all probably goes on Travel/Staff/etc.
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