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A certain start-up company that makes specialized computer games with
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14 Nov 2023, 08:32
Expert Reply
A certain start-up company that makes specialized computer games with historical themes is to hold a meeting of the five partners. Prior to the meeting, three of the partners have circulated memos about Xanthia.
The amount of money we have spent on developing Xanthia has been much more than we have spent on any other of our games. The returns, as yet, have not been sufficient even to cover our costs. I propose a limit of $150,000 for next year's marketing budget for Xanthia. If sales do not rise by the end of the year to a level that would, if continued, lead to at least a modest profit on our investment by the end of two or three years, I suggest that we cut our losses and divert our attention to other games.
As yet our exciting new game, Xanthia has not gained attention in the media. I would like to see a sizable budget increase this coming year to something in the order of $300,000 for advertising. I feel that once we reach a certain level of media exposure, further expense will be minimal as knowledge of the product will spread by word of mouth and the social media. Without this initial push, the game might languish and our company might never recover the development costs, which have been much higher than the average for our other games.
Xanthia adds a new dimension to our offerings. It is true that development costs have been high, but we should add the costs to the low costs of our other games and not, at least for the next two years, look at any game as a free-standing product. It is more important for us to grow our position in the market. To do this we have to launch more games this year. We should market Xanthia along with all the games we offer and as such we have to participate in specialist fairs and competitions, rather than advertising any one product in the press or on TV.
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1. It can be inferred that
Inferred
Not Inferred
Only the company founder would be interested in launching new games in the next year
All three partners believe that the development costs for Xanthia have been above the average for the company's games
Less than $150,000 has been spent on marketing Xanthia in the current year
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Only the company founder would be interested in launching new games in the next year: Not Inferred
All three partners believe that the development costs for Xanthia have been above the average for the company's games: Inferred
Less than $150,000 has been spent on marketing Xanthia in the current year: Not Inferred
Data Insights (DI) Butler 2023-24 [Question #112, Date: Nov-14-2023] [[url=https://gmatclub.com/forum/data-insights-di-butler-419150.html]Click here for Details]
Re: A certain start-up company that makes specialized computer games with
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23 Nov 2023, 12:12
1
Kudos
Expert Reply
soumyap09 wrote:
Can you please review the question/answers? For Q1, 2 options are the same and answers are different.
Fixed the typo, Thank you!
Official Explanation
1. It can be inferred that
Explanation
First statement: (NO). We know from his memo that the company founder is interested in launching new games. However, this point has not been addressed by either of the others and so we have no means of knowing their specific views on this issue. Not mentioning something cannot be taken for opposition. The word "only" is the best reason for rejecting this statement it is too strong to be justified by the data.
Second statement: (YES). The finance person states that the costs have been higher than for any other game; the marketing person makes a similarly explicit statement. We can infer that the company founder believes the same because he makes two statements that taken together imply higher than averages costs: "development costs have been high" and "low costs of other games".
Third statement: (NO). There is no information in any of the memos that gives a clear indication of the amount spent in the current year. We can infer nothing about current levels from proposals of future limits.
gmatclubot
Re: A certain start-up company that makes specialized computer games with [#permalink]